Obama & Fed's Derivative Controls = PR Puffery...
re: ["More on this (this was released on Reuters around the
time the Barrick news came out yesterday):
newsday.com
15 big banks commit to derivatives targets
September 8, 2009 By The Associated Press MARCY GORDON
(AP Business Writer)
WASHINGTON (AP) — Fifteen big banks that dominate worldwide
trading of derivatives have committed to greater transparency
in a $600 trillion market that regulators say needs stricter
oversight to protect the global financial system."]
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This is pure PR puffery, meant to show how the Fed is
bringing the banks to heel... and is nothing more than
toothless window dressing, meant to sway public opinion
to allow Obama to elevate the privately owned Federal
Reserve to chief US regulator.
The single most important issue here, is that DERIVATIVES
and LEVERAGE are at the root of the financial collapse and
the now $23.4 Trillion Dollars that US Taxpayers are on the
hook for.
And that $23.4 Trillion went to the Fed, to the banks, and
to backstop the banksters toxic paper they dumped on Fannie,
and Freddie...not into the US economy, or into creating jobs,
and that's PURE EXTORTION by Paulson & Bernanke.
And just FIVE banks hold 95% of the derivatives as reported
by the 25 largest US bank holding companies (see Bloomberg
link below).
JP Morgan alone, holds over 9 x the derivatives as did AIG.
This is a very narrow, and extremely concentrated problem.
Marc Faber had it right when he said all these derivatives
infested banks needed to be liquidated and closed down.
Pain? Sure. But a helluva lot less if we take the medicine
now, versus letting the cancer grow, and laying the bill
entirely on the US Taxpayers, instead of the banks, their
partners, employees, and shareholders & bondholders,
who all reaped the rewards from hundreds of billions of
nonexistent, digital profits.
And I don't think we should stop at just a wind down and
and a liquidation... I want claw backs, and prison time.
Give me a Remington 1100, a badge, and and a hand full
of warrants, and I'll get our money back. Won't need
no damn Gitmo, or waterboarding.
Put Hank Paulson on the stand with a jury from middle
America who've lost their jobs, their homes, their pensions
and have seen their schools, and local communities all suffer
from the biggest ponzi scheme in history.
Let Hank Paulson convince those people that when he went
to the SEC and bullied them into allowing the Wall Street
Investment Banks to SELF REGULATE and to lift leverage
restrictions from 10-12:1, to 40-50:1 and higher with
derivatives, that it wasn't as reckless as letting a
greyhound bus driver go 100 mph through a school crossing.
Let Robert Rubin convince a jury that he didn't know what
he was doing when he got Glass Steagall repealed and then
immediately upon it's passage, left government and took a job
with Citi where he went on to make a $100 million dollar +
windfall.
Let the banksters convince that jury that when they
passed the The Commodity Futures Modernization Act of 2000,
which created the "Enron loophole" that they didn't know
what they were doing...
Any transaction in exempt commodities between eligible
contract participants/principals not executed on a trading
facility was exempted from most CEA provisions.
Even the fraud provisions were excluded for transactions
between “eligible commercial entities!
And Enron and others didn't waste any time manipulating the
markets and cheating taxpayers... with Enron nearly bankrupting
the State of California while literally raping the citizens
of California by manipulating natural gas prices, with traders
even getting caught on tape, laughing about "Aunt Millie."
Plays those tapes to the jury.
And then put those banksters who dumped trillions of dollars
of toxic mortgage loans given to anyone who could fog a mirror,
not on their own balance sheets, but on taxpayer owned
Fannie & Freddie...turning the GSE's into Three Mile Island,
and bankrupting them, while they reaped hundreds of millions
in profits on bogus loans that crashed the financial system.
Unfortunately, those very firms who happen to hold 95% of
the derivatives, also happen to be the major shareholder
owners of the private Federal Reserve that is regulating
them.
The single last entity in the entire world that should
be supervising these five banks, is an entity that they
OWN and CONTROL - ie: the Fed.
Why do you think they are pushing so hard to elevate
the FED to the role of chief regulator?
By any other name... this is SELF REGULATION.
And didn't Hank Paulson already teach us about what happens
when we allow them to SELF REGULATE?
Also, 1/2 of these firms trading profits come from derivatives,
(see the Bloomberg link below).
And Geithner will not eliminate naked credit default swaps,
nor will he move all derivatives onto regulated exchanges.
(see video and transcript below).
They are only going to move some, NOT ALL derivatives to
exchanges and regulate them.
----------
bloomberg.com
Aug. 31 (Bloomberg) -- Wall Street is suiting up for a battle
to protect one of its richest fiefdoms, the $592 trillion
over-the-counter derivatives market that is facing the biggest
overhaul since its creation 30 years ago.
Five U.S. commercial banks, including JPMorgan Chase & Co.,
Goldman Sachs Group Inc. and Bank of America Corp., are on
track to earn more than $35 billion this year trading
unregulated derivatives contracts. At stake is how much of
that business they and other dealers will be able to keep.
“Business models of the larger dealers have such a paucity of
opportunities for profit that they have to defend the last
great frontier for double-digit, even triple-digit returns,”
said Christopher Whalen, managing director of Torrance,
California-based Institutional Risk Analytics, which analyzes
banks for investors.
The five biggest derivatives dealers in the U.S. -- JPMorgan,
Goldman Sachs, Bank of America, Morgan Stanley and Citigroup
Inc. -- held 95 percent of the $291 trillion in notional
derivatives value of the country’s 25 largest bank holding
companies at the end of the first quarter, according to a
report by the Office of the Comptroller of the Currency.
Trading Revenue
In the first six months of 2009, those five banks made $35
billion from trading in both derivatives, including interest-
rate and credit-default swaps, and cash instruments such as
Treasuries and corporate bonds, according to company reports
collected by the Federal Reserve.
Approximately 1/2 Of Trading Profits Comes From Derivatives
About half of JPMorgan’s $31.2 billion in trading revenue from
2006 to 2008 probably came from derivatives, based on a
breakdown the firm provided in a presentation in February and
revenue figures in regulatory filings those years, according
to Alexander Yavorsky, a senior analyst at Moody’s Investors
Service in New York.
The proportion of trading revenue that comes from derivatives
is similar at other top firms, according to people familiar
with the banks’ income sources.
----------
Check out the "shit eating" grin that Geithner has while
dismissing Congressman Joe Donnelly's (D - South Bend, In.)
concerns about "naked credit default swaps"...
Video:
youtube.com
voices.washingtonpost.com
From the Congressional Transcript:
Rep. Joe Donnelly (D-Ind.) asked Geithner if he would consider
banning the swaps.
"To me, I'm from the Midwest, these just look like simple
bets," Donnelly said, which American taxpayers have been
forced to pay off.
Geithner: "My own sense is that banning naked credit default
swaps isn't necessary and wouldn't help." He said it is
"terribly hard" to differentiate between a legitimate hedge
and a pure speculative bet.
------------
huffingtonpost.com
"Under the administration's plan, so-called standardized
derivative contracts would be traded on regulated exchanges or
trading platforms. Dealers would be regulated, and
participants would have to meet capital requirements to
prevent over-leveraging.
Banks and other parties would still be allowed to enter into
customized contracts outside regulated exchanges, under the
Obama plan, but the transactions would have to meet more
reporting requirements.
Frank, in an interview with MSNBC after the hearing, said he
would further limit the ability of businesses to enter into
individualized derivative contracts.
"We will specifically be requiring that in almost every case
derivatives go on an exchange ... or a clearinghouse, that
there not be these individualized deals," he said. "And if
people are going to make individualized deals, they're going
to have to have a lot more capital behind it. "
Barney Frank also said he would call for a ban on so-called
naked credit default swaps, a type of derivative where buyers
have no risk of exposure.
Some Democrats have called for fewer customized derivatives
contracts and a few have urged that some derivatives, such
as credit default swaps, be banned.
The administration's proposal, part of a broader overhaul
package, has opposition from much of the financial industry,
which says it would raise costs and squash innovation. The
industry insists any legislation be flexible enough to permit
businesses to tailor contracts to meet their specific needs
and not standardize all derivative contracts.
Lawmakers have also questioned Obama's proposal to give more
power to the Federal Reserve."
-----------
Once again, who did Obama meet with on the first day of
his Martha's Vineyard vacation?
Not just bankers, but bankster-gangsters...
UBS who just paid a huge settlement to the US for money
laundering, and who's top US executive Obama met with,
and who gave Obama $250,000 in 2006 and $543,219 for his
2008 campaign, making them his 12th largest contributor.
And once again, who are Obama's biggest campaign contributors?
The Banksters...
Top OBAMA Campaign Contributors
opensecrets.org
1. University of California $1,591,395 -- socialist academics
2. Goldman Sachs $994,795 -- bankster gangster
3. Harvard University $854,747 -- socialist academics
4. Microsoft Corp $833,617 -- monopoly men/CIA techopoly
5. Google Inc $803,436 -- monopoly men/CIA techopoly
6. Citigroup Inc $701,290 -- bankster gangster
7. JPMorgan Chase & Co $695,132 -- bankster gangster
8. Time Warner $590,084 -- media monopoly
9. Sidley Austin LLP $588,598 -- financial gangsters
10. Stanford University $586,557 -- CIA Think Tank
11. National Amusements Inc $551,683 -- poverty pimps
12. UBS AG $543,219 -- bankster gangster
Goldman -- #2 Obama contributor
Citi -- #6 Obama contributor
JP Morgan -- #7 Obama contributor
And who are the main derivatives offenders.
Goldman, Citi, and JP Morgan.
Don't hold your breath.
And even if they close all the loopholes, eliminate naked
credit default swaps, and move all derivatives to regulated
exchanges... the bastards just got away scott-free, with
looting America out of $23.4 trillion dollars in bailouts,
and backstops.
To put that amount of money in perspective, according to the
New York Fed, there is only about $829 billion dollars of U.S.
currency in circulation.
And the total market capitalization of the entire S&P 500
is only approximately $10 trillion.
We don't need Bretton Woods III to fix the banking crisis,
we need Nuremberg II.
These greedy, thieving bastards ruined the lives of tens of
millions of Americans. They aren't just criminals, they're
economic terrorists.
Tell me Hank Paulson, Robert Rubin, Angelo Mozilo, and all the
other crooked CEOs, partners, and traders, as well as the hacks
at the ratings agencies who put the AAA stamp of approval on
piles of shit, while laughing all the way to the Hampton's...
all don't belong in jail beside Jeff Skilling, Bernie Ebbers,
and Dennis Kozlowski.
Regulate, liquidate, and then clawbacks and prison time.
That's how you fix it.
That's the only way you make sure it never happens again.
And this time... no rat lines.
SOTB |
