Article

2009-03-26 Economy

Geithner to Seek Power Over Large U.S. Hedge Funds, Derivatives

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Posted by tipper 2009-03-26 05:37|| || Front Page|| [3 views ] Top

#1 or....you go back to the time when regulations prohibited banks and or their various paper fronts could even play with speculation like that. Then, of course, the banks and allied institutions couldn't gain as much in the bursts between the busts.

Posted by Procopius2k 2009-03-26 08:42|| 2009-03-26 08:42|| Front Page Top

#2 How about gambling with your own money. No margin. No borrowing. No derivatives. Then the next time the financial savants get wiped out, they can just go home and eat a bullet w/o bothering us already poor taxpayers.

BTW, the total value of derivatives written is over $500 trillion. The pigs are going to be at they taxpayer trough for a long time.

Posted by ed 2009-03-26 09:36|| 2009-03-26 09:36|| Front Page Top

#3 Karl Denninger commented on the proposals: "Forcing derivatives (including OTC CDS) onto central-counterparty exchanges. IT IS ABOUT DAMN TIME!" -- Remember, Credit Default Swaps are still being written, mostly in secret. "You can expect the banking industry to scream bloody murder on CDS regulation. The reason is simple - this has been an absolute gold mine for them due to the intentional price obfuscation that OTC trading provides. That is, by keeping the bids and offers "to themselves" they can rob the buyers and sellers via a grossly-wide spread, pocketing the difference. Central-counterparty exchange listing will inherently narrow those spreads dramatically and this means much less income from the trading of these vehicles (as opposed to unhedged speculating, which I argue banks should not be engaged in anyway!)"
He points out the Fed is not accountable to the taxpayer. But then, no governmental agency is accountable to the taxpayer in reality. Congress is only accountable to its campaign contributors.
"There is no call for re-imposition of Glass-Steagall. This has to happen folks. Bluntly, depository and lending functions need to be treated as utilities. I know a lot of people would disagree, but this is how I see it, because it is the corruption of these functions that led to this mess being "systemically important.""

Posted by Anguper Hupomosing9418 2009-03-26 12:10|| 2009-03-26 12:10|| Front Page Top

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