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Senator Cantwell: Congress WEAKENING Existing Derivatives Regulations
Senator Cantwell said this today about the new derivatives legislation passed by the Financial Services Committee:
The shenanigans just began here in Washington.
What
is moving through on the House side is a bill that supposedly has a new
rule, but has so many loopholes that the loophole eats the rule. We
want to say we have transparency and regulation, but it will continue
to have loopholesCurrent law with its loopholes would actually be
better than these loopholes, which are just going to continue to
promulgate the problem.
The Treasury Department should be ashamed
of themselves. They have blessed this deal. [The whole idea that the
proposed legislation would ameliorate the problem is] a mirage. It's an
act of commission, that's very, very dangerous for the future of our
financial system.
An "act of commission" is a legal term for an unlawful action (as opposed to "an act of omission" which means breaking the law by unlawfully failing to act).
If Cantwell understands the term, then she is saying that Congress is
acting unlawfully by intentionally weakening derivatives regulations.
In any event, leading derivatives experts agree with Cantwell that the proposed legislation will do more harm than good.
As Robert Borosage writes:
The
best experts in the field -- like Michael Greenberger of the University
of Maryland -- warn that the legislation might end up WEAKENING current
law. That is no small achievement, because, as we saw in the collapse
of AIG, current law is toothless...
Satyajit Das says that the new credit default swap regulations not only won't help to stabilize the economy, they might actually help to destabilize it.
And as Huffington Post notes :
Rob
Johnson, former managing director at Soros Fund Management and chief
economist of the US Senate Banking Committee, called it a "form of Wall
Street protectionism" that would not "address the fault lines that OTC
derivatives represent."
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I see on the campaignforliberty.com site that Cantwell, Murrey nor Norm Dicks has signed on to the Ron Paul Bill to audit the Fed.
But she was for spreading depleted Uranium throughout the planet (voted for the Iraq War and every war-supporting bill since).
She is very selective in what she votes and voices her support for, so when she finally came out for that "public option" (really just a ruse for a backdoor bailout of the insurance industry, structured to utilize medical exchanges as yet another device for securitizing of healthcare receivables and mortality bonds, etc.) it was obvious that it would fail.
So if she lambasts this phony derivatives "legislation" it is pretty certain nothing will ever come of it.....
(Although I'd love to be wrong on this!)
Banks own the Senators.
"Ever more the pinstriped bosses roll the dice.
Any way they fall guess who gets to pay the price.
Money-green, it's the only way.
Buy a whole god-damned government today."
John Barlow/Bob Weir, "Throwin' Stones"
Sen. Cantwell was a leader pressing for CFTC action on oil prices back when it spiked to the $140's level. She did so even though Bernanke, T.Boone Pickens, Hank Paulson, et. al. declared that speculative investment was not driving the price. It is too bad we don't have more people like her in Congress. What is happening now reminds me of Barney Frank's actions to revoke mark to market accounting by pressuring the NASB. The rest of the world sees what is going on, it's too bad our public doesn't get it. I'm still waiting for the Obama transparency and changes to the financial system. Does weaking the rules count as change?
I worked with Maria Cantwell on a Senate campaign back in the early '80's in delaware. Nice woman but no financial genius. Realnetworks was more a "right place,right time" situation than acumen.
If markets were effiscient, all the banks loaded with derivatives would not find counterparties be in funding or in derivatives.
So. does this have anything to do with FASB 166 167 ?
Bloomberg has a nice CITI , JPM whine article loaded with bank threats to stop lending if " mark to books" accounting is forced on them . Poor poor babies , heres your babba.
I always either vote Independent, Green, or write in candidates when I vote. If EVERYONE did this, problem solved. Current Congress would be over. Why can't more people be like me? Heh. Alas, so many Americans are ignorant due to reliance on the lie box known as TV.
Cantwell was one of the few that voted against TARP. I am a WA voter and she already had my vote for life.
Agree with Senator Cantwell or not, she was successful at RealNetworks and understands the process of finance & trade quite well. I suspect that with her next reelection not up until 2012 she has either been chosen or volunteered to represent a block of senators willing to voice the obvious. After all, she can self finance her reelection and sits in a fairly safe seat. I would be interested to know the composition of the group of senators who share her views.
It might be that the senate actually deliberates this issue.
Actually, she wasn't "successful" at RealNetworks, she was simply given a large block of stock for being the VP of Human Resources there, and then she fulfilled her payoff by serving as Cantwell, D-Microsft.
Her voting record has long positioned her as a Bush-dog dem, and her shallow, self-serving questioning of Prof. Greenberger about derivatives markets, etc., before the Senate was a colossal sham.
(She also lost a huge chunk of her money when that RealNetworks stock tanked.)
But, for once, she is on the correct side. Let us hope she continues in this manner.
Here's a nice link to go along with the GW article:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOWY.L8unNU8
$1.42E9 in the hole, and Geithner wants to talk confidence in fiscal management.
How long before the US defaults on its debt? Is there an alternative?
$1.42E12, but what's a factor of 1000 between friends?