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CFTC Delays Swaps Regulation By Another 6 Months To Comply With Wall Street Demands
One year after the passage of Dodd-Frank's provisions on swap regulation absolutely nothing has been implemented. And judging by the just announced yet another 6 month delay of rule implementation, it now appears pretty much certain that the $600 billion derivatives market will never be actually regulated, courtesy of conflicted interests at the CFTC. "The U.S. Commodity Futures Trading Commission proposed delaying rules for the huge derivatives market that had been automatically set to go into effect on July 16. One year after the passage of the Dodd-Frank financial overhaul that ordered a crack-down on the $600 trillion derivatives market, regulators have not been able to meet the deadline for translating the legislation into specific provisions. That prompted the CFTC on Tuesday to propose delaying some of the so-called "self-executing" rules until as late as the end of the year." After all, it is the CFTC's sworn duty to do anything to help the poor OTC traders who may experience a modest drop to their multi-million year end bonuses if profit margins are cut into by regulatory intervention: "Traders had feared that billions of dollars in
transactions might suddenly fall into legal limbo. Without relief from
the CFTC, a delay could have caused those contracts to lose the legal
protection afforded them by a clause in the Commodity Futures
Modernization Act of 2000 that created a framework that stated they were
not illegal off-exchange futures." But lest someone suspect the fine upstanding gentlemen at the CFTC led by former Goldman Sachs employee Gary Gensler who has absolutely no interest in seeing his old firm continue along the confines of the status quo (very much like that other form Goldmanite Hank Paulson), the CFTC did provide this brilliant clarification: "The temporary relief proposals have "nothing to do with any outside pressure one way or the other to extend the rule-making or the effective date," a CFTC staff member said." Well, if they say so, it must be true.
More on why absolutely nothing will ever change until the next blow up which since it is backstopped by every central bank in the world, will be the very last one. From Reuters:
Those granted temporary relief from the new guidelines include transactions in exempt or excluded markets -- primarily in financial, energy and metals -- as well as measures that do not require rule-making but refer to terms such as swap, swap dealer or major swap participants that must be further defined by regulators.
"The exemptive relief that's being granted by the Commission would allow virtually all the same types of transactions conducted now to continue during this period," a CFTC staff member told reporters ahead of an agency meeting.
The relief measures became necessary after the CFTC said it would miss the July 16 deadline to write regulations for the over-the-counter derivatives market.
The delay risked a legal void for trades that would be caught between the current regulatory framework, which ends next month, and and not yet offered protection under as-yet unfinished new rules.
Mutually Assured Destruction is here again:
Without some type of short-term fix until the new rules are in effect, Wall Street investors worried the market would be thrown into chaos, casting doubt on the legality of derivatives trading and stoking fears of dried-up liquidity and an exodus to offshore trading.
The exemptions, which are open to a 14-day public comment, would last through Dec. 31, unless the rules go into effect first. The temporary relief would not apply to measures already in effect, or on futures contracts, options on futures, or transactions by retail customers in foreign currency or other commodities.
We are happy to bet any amount of single ply toilet dollars that come December 31, absolutely nothing will change, and the CFTC will indicate that traders are horrified of the market destrcution that would ensue should a 2 year old law (at that point) be finally enforced:
"Six months will provide the Commission with the opportunity to re-examine the status of final rule making in light of the changed regulatory landscape at the time," said CFTC Chairman Gary Gensler at the agency's meeting on Tuesday.
The CFTC said the proposals "provide the needed clarity for market participants" and should address any legal concerns for swaps beginning on July 16. Still, some industry watchers questioned whether the CFTC has enough legal power to propose these measures.
And with Republican now at the helm, expect deregulation (even with regulation effectively at zero as is), to become the name of the game:
The first comprehensive U.S. regulation of the swaps market is on track to be implemented this year, but Republican lawmakers have introduced legislation to slow down the process.
The temporary relief proposals have "nothing to do with any outside pressure one way or the other to extend the rule-making or the effective date," a CFTC staff member said.
And the punchline is that Wall Street which ultimately pushed so hard for this first of many delays, now blames the CFTC:
Wall Street banks and major market players have
said they are equipped to comply with derivatives reforms, but accused
U.S. regulators of dragging their feet on clarifying how and when they
will go into effect.
In other news, let the rape and pillage of the global middle class continue. After all, that is the status quo.
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Before we settle the elections drama, i don't see anythihng being implemented.
Well theres ALWAYS some sort of drama which first must be settled before reality can be implemented. Whether its earnings season, or the results from some live feed speech from some emtpy suit or other, or the results of a vote from a bankrupt nation, always something.
Re: CFTC -- When you incentivize stupidity, smart people will start playing dumb.
And that is the true reason why the market today is in retarded mode...
I thought it was the good ol' "recessions are bullish" fundamentals at work today but this might have something to do with it too.
CFMA 2000 is the evil twin to the gutting of Glass-Steagall. CFMA is such a license to steal in the dark that Bubba signed it with just a few weeks left in office. He was next seen at the White House door with Hillary loading up the china and silverware.
lol
"If only the shotty hastily (moronic) regulations could be kicked in, fraud and theft would be stopped"
Right.
Isn't that a similar falacy to...
"If only we had a constitution to keep back government intrusion"
Couldn't one also argue that any of the following possibilities are "business as usual"
A. Passing shit legislative regulation that doesn't get implemented
B. Passing shit legislative regulation that gets enacted and it doesn't matter anyways
C. Not doing anything.
Does anybody really think any of those are not the status quo? Does anybody really think that passing this legislation and "implementing" it would somehow prevent "middle class raping"? I mean come on.
+ 9 gajillion.
"One year after the passage of the Dodd-Frank financial overhaul that ordered a crack-down on the $600 trillion derivatives market, regulators have not been able to meet the deadline for translating the legislation into specific provisions. "
This is something I'm an expert on and it is how the government works all the time. Stop putting your faith in the government. It doesn't work.
I mean this article is a total "so what?" in my opinion. Other than just saying, "yes, the government makes promises it can't keep," Thats all that can be taken from this.
The sensationalization of "well now the fraud and theft is going to continue" is just empty, fake, and strawman analysis. If the article was instead "CFTC is on schedule to regulate swaps" do we really think we would have a happy article about how justice is finally served?
The article has the logical implication that if only the regulation was in place the shit would end. Which is false. Instead of derivatives they'll call it "Derpa Derrrs." Which fortunately (for them) aren't regulated yet.
they have been debating for 30 years on a law as to which end an egg shall be opened, and still haven't gotten the an agreement on legislation wording.
Spinning straw into gold, the American way.
That might be critical towards the general interest of the public. Continue the debate!
Yes...it is "party on the taxpayer" mode again...
I see an apocalyptic end to all of that "just don't get into the private capital pockets" mode...that and Greece are a great example of that...
naaa. It's all banker fear mongering.
Guess what. Greece defaults and in 12 months the banks are whole and Greece is happily selling bonds again.
They'll find a way to reflate all the derivatives. Especially with GOP in charge.
CFTC=Bankster Puppets for Price Manipulation
"conflicted interests"= lying and cheating
Seems that they are doing it EU-commission style. Didn't know Jun(c)ker does consulting jobs too. But hey, when things get tough, u have to lie.
I get a warm fuzzy feeling knowing that the CFTC wolf is guarding the people's henhouse against another rape by Wall Street poachers.
And we were expecting.....just what exactly?
party on garth
http://www.youtube.com/watch?v=nTheG--2NE0
Like all regulations none of it is taken seriously until "after" the implosion has occured.
More regulations will come with the next blow up and then again fail to be implemented.
Then, when regulations are finally implemented the train will have long left the station and your money with it.
Don't expect the US Gov to actually reform the CFTC. They need to use the smoke and mirrors at times to facilitate the monetization ponzi. You know, printing up pallets of paper and such.
Crooked is, as crooked does.
I've got an idea, just declare CDS contracts null and void and require putbacks on the 'insurance premiums' going back 2 years and call it DONE.
Anyone paying out "protection" on their favorite CDS is a s u c k e r.
They will never be repaid.
It is a story that breeeeeds confidence, credibility, and stability in markets. I'm sure capital will form up by the billions and pile into CDS...ensuring economic growth and freedom for all.
This...even as the holders of CDS, TBTF banks, are now teetering on the edge of the second leg of the financial crisis and are readying for their next plunge...while Tim Geethner readies the next "I have a bazooka in my pocket" speech.
Well, I see Ponzi land is cooking with gas, as usual.
**Oh...and just short more of Average Joe's dollars...and his silver too...and again, everything is fine**
No problem! I hear we have Chinese 'tourists' comin, hooray! Nevermind these 'tourists' are likely to be seen in Chinese military uniforms, just get busy making those rice balls, its the new US economy!
CFTC can justify maipulation all they want - Goldman is going short commodoties anyway so only fools would buy Silver or other tangibles...right ?
Interestingly, the single largest 'Stopper' of Comex gold contracts in recent weeks has been none other than our friends at JPM. So, on the one hand they continue to sell masses of paper gold and silver into the markets to keep the price down, and on the other, they are taking physical delivery of (so far this month) nearly a million ounces of gold.
I wonder what it could all mean?
My broker has been advising me to add more to my portfolio seeing the same thing you see....i.e., that these large investment banks and CBs are loading up on physical while selling paper and supressing the price of silver and gold.
There goes Ted Butler's hope for regulation in the PMs.
<snicker>
Thanks for the invite DCRB. What is the site again?
"The temporary relief proposals have nothing to do with any outside pressure one way or the other to extend the rule-making or effective date" said CFTC staff member Ben Dover.......
"The temporary relief proposals have nothing to do with any outside pressure one way or the other to extend the rule-making or effective date" said CFTC staff member Ben Dover.......
Which confirms the opposite
Would someone mind going into Wikipedia and changing the following entry to more accurately reflect the post Donk-Fraud mission of the Bart "Everybody loves him" Chilton commission?
The stated mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.
Dave Harrison
www.tradewithdave.com
US banks have $100 billion in CDS exposure to European sovereign debt.....we have to wait until TARP II for "regulation" of derivatives.
Only real danger is the football strike....one less drug to keep the sheeple distracted while their remaining assets are looted. Look for Jamie D to denounce the greedy owners and players and demand congressional action before Greece defaults.
Real easy to have new rules when theyre never intended to be actually implemented.
"an exodus to offshore trading" ?
To where exactly ?
What fool country would want the risk ?
From the "Nothing Has Changed" department:
Really, I have been telling everyone that after the "Great Disintegration" ...that began three years and three months ago (with the implosion of Bear Stearns) that absolutely NOTHING has changed regarding our Ponzi monetary system, nor the people in charge of it.
To wit:
1. The Same Alpha Male Wall St. Thugs are in the same positions (or different, and even greater) power (for instance: Bernanke and Geithner, as well a many others)
2. With very few exceptions, the same P-Men are in their same positions, raking in tens of millions of dollars from their P-Men schemes (see below)
3. ZERO change to the fiat currency, fractional reserve lending, central banking scam
4. The entire GSE complex still exists and still creates MBS sausages
5. Finally NO, NONE, NADA change to the derivatives casino (again, see below).
So, imagine my (complete lack of) surprise when Tyler reports that the PigMen have managed to get the so-called "regulators" to again delay any policing of their derivatives shenanigans--DESPITE The passage of the "Dodge-Spank" bill that specifically called for these regs to kick in next month.
(Conclusion): Despite all the FACTS above, I still have to suffer through a few, deluded Luddites who continue to screech:
"Any minute now, we swear, this whole Ponzi Scheme is gonna blow, then the Alpha Male Wall St. Thugs and PigMen will be driven from power and all us (really smart and cool and handsome,too) "Hard Money Advocates" (who actually do nothing to actually change the system outlined above) will be in control. Oh and the sheeple will rise up and follow us to the Promised Land of Prudent Monetary Principles".
Well, not to rain on your little Prole Parade, but here we sit: Three-and-one-third years past the "Greatest Economic Collapse in the History of Mankind" and the Plutocrats and PigMen are still firmly in charge.
And the corrupt system is firmly in place.
"Wash, Rinse, Repeat" into infinity.....
LOL....
You keep dripping with admiration for the PigMen Robo, but you'll never be one.
so true....
Yup. " An awful lot of bad economic data is already priced into the market ", sez Bank of Merrill
http://www.bloomberg.com/news/2011-06-14/investors-pile-into-cash-as-hedge-funds-cut-debt-merrill-says.html
Can I get a job 'working' for the CFTC.
I think it entails sitting on a chair facing the wall and wanking all day.
You have to face the wall because Gensler gets embarressed if you see how small his dick is.
Fuckin' muppets.
Hey RobotTrader, so what are you doing to change the system? Twat.
There should be hearings on Capital Hill about this delay and a lot of hard questions being asked. Followed by impeachment.
The Government is being useless!
And of course we'll get nothing but the crickets chirping soundtrack.
Congress pushed for the delay. There won't be hearings.
Our beloved congressional representatives enjoyed all the nice dinners and sporting events with the bank lobbyists so they decided to extend to reward them. Now they have to have a lot of dinners with the fine lobbyists who will urge them to push forward. That will create a round of sabre rattling encouraging the bank lobbyists to take them out to more dinners and sporting events. But maybe this isn't how government really works?
Ag committee in particular pleaded with CFTC that farm(lobby)ers and other end users would be crushed by the compliance and evacuation of less than liquid market points. So they paraded Gensler et al into the hearing room and read them the teleprompter act.
I have no knowledge of how the banksters were playing this.
...and halting civil unrest through statistical manipulation of inflation's (PCE/CPI/Gas/Oil/Gold/CRB/Coffee) main "CFTC engines" thus:
Tada: "Inflation expectations remain transitory..."
The CFTC is completely, and I mean completely clueless about how the commodities markets work and the implications of the rulemakings. There is no way they could get any of this right. I am/was pretty close to this for my industry, and I've been astounded at who in D.C. is allowed to carry a card that says PhD on it.
BTW, the now apparent lack of urgency to gain liquidity for margining purposes should further dampen demand for Treasuries.
That exists in all locations of the government. That PhD might be in Art. That isn't a sensational comment, considering I know people with such degrees in such positions.
I know it's against the (unwritten) Fight Club rules to bring up the Dem/Rep thing but, while both sides are incompetent, the knee jerk move to put the GOP (actually the Tea Party) in charge of regulation and funding did have (very negative) consequences, and they all come down in favor of the bankers!
Hopefully, cooler heads will prevail next time and we can actually begin to regulate these psychopaths while we still have some semblance of an economy left to regulate.
Huh?
What does the tea party have to do with this? GOP wasn't even in control of the house during the time of this legislation. The Tea Party also isn't "in charge" of regulation.
What are these "very negative" consequences you speak of? How do they favor bankers? There isn't a single fact or plausible truth in your entire post.
Who the hell do you think is holding back the implementation!!!!
Are you brain dead?
Am I brain dead? You're an assumptive idiot who clearly has no idea what they're talking about. You're the definition of group think. "Oh, it must be those rascally, corrupt (new I might add) politicians who are holding up this legislation." The fact that you think that holding up this legislation is a BAD thing shows you're for status quo who yes, believes in the Rep/Dem paradigm even though you want people to think you don't. You'd support legislation that a moronic oppressive fool (Barney Frank) thinks is a good idea? Why don't you read beyond "this is wall-street reform" before you form an opinion.
You have significantly too much belief that a bunch of bumbling block heads play that much of a direct role in getting anything accomplished (or not) in government. Perhaps you should read the article and take note of not ironing out specifics. This is typical government bullshit where a lot of "good" (shit) ideas come out (usually in haste) and the implimentation is unlikely if not out right ridiculous. Have you even worked for the federal government before? If you had, you'd understand that this is pure incompetence. Not the mystical corrupt work of a bunch of newb freshman that the executive and legislative branch could give only two shits about.
Drink some more Tea Party Kool-aide, and see if you can stick your head a bit further up your ass!
The Tea Party (funded by corporate interests disguised as a "grassroots" movement) completely control the serious GOP legislators (and of course they have the newbies that have no idea) through threat of GOP nomination challenge (my apologies for not expaining what I thought was obvious). They have unlimited funds (thank you GOP Supreme Court block), and the ability to stop almost anyone (you do remember Christine O'Donnell don't you... it, and several others, were a strong message to mainstream GOP legislators foolish enough to step out of line, and demand controls on Wall Sreet).
Both sides are incompetent, but one is 100% in support of the corporate rape of the middle class... obviously you're "alright Jack," and couldn't care less about the "little guy."
I do.
Tea Party is not holding back on the implementation. I am very close to those that have had a hand in holding it up. See my post above.
This is not a partisan thing. It is a competence thing. The CFTC got the funding they pleaded for but realized they had no idea how they were going to implement this stuff. The legislation doesn't even make sense in places, and they don't have the horses to figure it out.
Trust me, I've been in the room with the CFTC and they are lost.
"it now appears pretty much certain that the $600 billion derivatives market will never be actually regulated,"
"One year after the passage of the Dodd-Frank financial overhaul that ordered a crack-down on the $600 trillion derivatives market,"
Billion / Trillion...
DaBoyz club are all phukking crooks. Enough said.
I'm now convinced the CFTC exists primarily to make the SEC look good by comparison.