Friday, December 11, 2009

2 Words: "Oo" & "fah"

WOWeeee. This is no holds barred in your face by DEMOCRAPS, the party that some "liberals" still believe in. In light of everything that's happened with EM08, and in relation to derivatives, Brooksley Born, this is plain astonishing. The brazen manner in which these shitheads operate is jaw dropping.

If you can believe it, my bigger point is that this new proposed oversight committee, the "Financial Services Oversight Council," scares me to no end. Why?

Listen, my thing over the last year or so has been what I call "the refs," and there were plenty of them in the making of EM08. Simple logic tells us that creating another set of refs isn't the answer, let alone fighting over more or less regulation of derivatives. After all, the mortgage poisoned financial products would not even have seen the light of day, if the CRAs had properly done their job of rating those products junk status, or at the very best as a cautionary investment.

In other words, Don't treat symptoms; get to the root causes. But in the worst case of logic ever, now uncle scam wants to create more refs. This is just plain stupid.

The answer is to not create more refs, but to find out why it is that the many refs we have now and just as importantly, the systems that they operate in, cannot, do not, or will not proceed effectively and do their job.

1. "Effectively" as defined as to relevantly inform the public, so that the public can make informed decisions and guide congress.

2. "Effectively" meaning in concise, plain language, not paper tsunamis that congress is so enamored with that filibuster and turn most people completely off. Any savvy investor will more often than not only read the exec summary of a business plan, and base her decision on that; the elevator pitch, management teams, and the proformas. - that's what it's for, to display that one can effectively communicate without a lot of broohaha used car salesman marketing gibberish. The logic being, if you can't do that, then why should money decide that you're capable of starting, building, and maintaining/managing a business if you can't even clearly talk about it, much less map it out and show "little things" like cash flow, year to year projections and roi coherently. Makes sense to me. Now, for shits and giggles, let's imagine congress trying to conform their diarrhea of the pen to that constraint. Funny, huh?

What this is really saying is that congress and the refs who are on the governmental side of the equation (don't forget, there are other, ngo/individual refs, such as the fourth estate, analysts, trade organizations, academics, authors...) must learn how to effectively communicate in general, but particularly when risk is involved and with our money. ANY savvy investor, from Buffett to Soros, would be accorded this going in to some high stakes gambling. It lets you know the risks involved so that - just as a gambler does - you can evaluate, assess risk, and set odds. In other words, one can make an informed decision. The American public represents the biggest stake pool in the world, but in terms of investing we're treated like caged animals to be fed scraps and water and kept at bay with cattle prods. The bottom line for the American people is that if congress can't do this, then they need to get the fuck out of Dodge. Make no mistake, unless the system is revamped, you're being served, and it's on a plate with garnishing.

3. "Effectively" in terms of being elected by the general public and not appointed. It's high time the American people became financially literate - way too much is at stake to be left in the hands of a few elite shitheads and their field negros who do their massas bidding.

4. "Effectively" as to be mirrored at every level; fed, state, county, city. It's outrageous how the present poisonous mindset infects every level. Just this past week, the LA County Board of Supervisors loaned $14 million to the LA Opera - while tens of thousands of Angelenos are stranded out of work.

As usual in Bizarro World, though, "they're" all about putting on a show and treating symptoms.

To those who don't believe the fix is on, keep reading...

cartoon by the great Jules Feiffer

Thursday Dec. 10th
House eases restrictions on derivatives trades

8:56 p.m. | Jim Kuhnhenn | The Associated Press

WASHINGTON — A bipartisan coalition in the House voted late Thursday to make it easier for corporations to engage in complex derivatives trades without government restrictions, eroding the reach of proposed regulations to govern Wall Street.

Democratic attempts to toughen the legislation failed.

Though not major setbacks, the votes illustrated the difficulties facing House Financial Services Committee Chairman Barney Frank and the Obama administration as they seek to pass legislation aimed at preventing a recurrence of last year's Wall Street crisis.

Key votes loomed ahead, with a final vote on the sweeping legislation scheduled Friday.

Democrats hoped to fend off an amendment Friday that would eliminate the creation of an independent Consumer Finance Protection Agency. The agency is a central element of the Democrats' legislation and the Obama administration's proposed regulatory changes.

The amendment was offered by Rep. Walt Minnick, a conservative Democrat from Idaho, and seven other centrist Democrats. The U.S. Chamber of Commerce, which has been running national television ads against the creation of a consumer agency, said it would base its support for lawmakers in next year's elections, in part, on how they voted on the amendment.

"I think we're going to beat the Minnick amendment, but it's a real test," Frank, D-Mass., said Thursday. Creating a consumer agency is a top priority for consumer groups and for labor organizations such as the AFL-CIO.

Democratic leaders also were pushing changes that would add further restrictions on banks and financial institutions. One, vigorously opposed by banks, would let bankruptcy judges rewrite mortgages to lower homeowners' monthly payments.

A coalition of banking organizations on Thursday sent lawmakers a letter urging them to vote against the amendment. The House previously passed bankruptcy-mortgage legislation, but it failed in the Senate.

The legislation imposes new regulations on derivatives, aiming to prevent manipulation in and bring transparency to a $600 trillion global market. But an amendment by New York Democrat Scott Murphy, adopted 304-124 Thursday night, exempted businesses that trade in derivatives, not as financial speculators, but to hedge against market fluctuations such as currency rates or gasoline prices. The amendment also provided an exception for businesses that are not considered too big to be a risk to the financial system.

A Democratic effort to make more companies subject to derivatives regulation failed 279-150.

The Chamber of Commerce circulated a letter Thursday urging lawmakers to vote for the Murphy amendment and against the broader regulation.

The House debate comes more than a year after the downfall of Wall Street banking house Lehman Brothers Holdings Inc. panicked the financial markets and forced an unprecedented intervention by the federal government. The Senate is expected to consider a bill next year.

Backing for the overall bill splits along party lines. Republicans cast the legislation as a continuation of unpopular financial industry bailouts, while Democrats portray the GOP as reflexively opposed to any controls on Wall Street.

"What we've seen from the an attempt to spend our way into jobs, an attempt to borrow our way into jobs and now an attempt to bail out are way into jobs," said Rep. Jeb Hensarling, R-Texas. "And what is the result? The result is the highest unemployment rate in a generation."

Democratic leaders have focused on their own ranks, however. They had to scramble Wednesday after party centrists rebelled and threatened to delay the bill if the House was not allowed to vote on their proposed amendments.

At issue were changes they sought to ease regulatory provisions on consumer protections and complex derivatives trades. The impasse broke, but only after top Democrats spent more than an hour with high-level Treasury Department officials in Speaker Nancy Pelosi's offices crafting a compromise.

Rep. Melissa Bean, D-Ill., succeeded in getting her consumer protection limits inserted into Frank's version of the bill. Her provision would make it harder for states to enforce their own consumer protection rules on national banks. Under the compromise, states would not be able to pre-empt federal consumer laws if the state law "materially" interferes with the business of banks.

"It's solid progress in the effort to provide consistency and uniformity to the American consumer," said Scott Talbott, chief lobbyist for the Financial Services Roundtable, an industry group.

The broader legislation hits big banks hardest, a response to public anger at the notion that some institutions had grown too big to fail and pushed the nation's financial system to the brink of collapse.

It would create a Financial Services Oversight Council to monitor the financial system and watch for future threats. Large, interconnected firms would have to put more money into their reserves. They would have to feed a $150 billion fund to cover the costs of dismantling a failing competitor. And even if healthy, they could be forced to downsize if they are deemed a grave threat to the economy.

"American families will no longer be at the mercy of the Wall Street in terms of their jobs, their homes, their pension security, the education of their children," said Pelosi, D-Calif.


The bill is H.R.4173.

© 2009 The Associated Press. All rights reserved.