Wonkette
Sure, Barack Obama changed his mind about releasing the very scary photos of widespread medieval U.S. war crimes everywhere, but Robert Gibbs cut off that leftist hippie firestorm right quick when he stole a reporter’s telephone and everyone got distracted and forgot about war and stuff. What’s the other terrible thing happening in the world now? Oh yes, money, and how we lost all of it after a few companies had to put up collateral on all those credit default swaps they made in secret, but then they didn’t have any reserves whatsoever, because saving is gay. Well the Treasury is finally releasing a plan to introduce basic, very basic regulations to the derivatives market. Why does the government hate capitalism?
There are two key things here, things that should not be controversial in any financial market of this magnitude: (1) derivatives must be traded through regulated central clearinghouses, not in SECRET, and (2) some percentage of reserves must be maintained to cover for losses, just in case, for example, “housing prices go down.”
As our balanced Washington Post newspaper tells us, these impositions are considered very Controversial by the banks, which are just trying to represent the interests of Main Street against this Muslin government:
In turn, the clearinghouses would require traders to maintain enough money in reserve so they could cover losses in any investments gone bad. These so-called margin requirements have been a hotly debated issue between the government and private traders because it curbs their profits.
“These so-called margin requirements.” Jesus.
Not that it will matter.
Some analysts recently have been warn of loopholes in the administration’s plan, which officials have hinted at in recent months. The proposal would allow a limited number of highly specialized derivatives to trade without going through a clearinghouse. Some analysts warn that this exception might lead derivatives traders to create increasingly complex derivatives to avoid regulation.
At what point does a civilized society stop allowing “derivatives traders to create increasingly complex derivatives to avoid regulation” and start scorching them with blue fireballs, on live television, on Twitter?
Obama Administration Plans New Regulations For Derivatives [WP]
I got tired of telling people I average around $35K/year. I figure I’ll add the following nine years of income to my total, so I can tell people I earn $350K/year instead. Then I just keep moving that 10-year window year after year. God I’m good.
I think we should torture any bankers who are against this plan, so we can find out the truth about what they are really up to.
Lindsay Graham, the stinking lying idiot turd, but very respectable Senator, said torture works today on the teevee, and it has for 500 years damnitall.
Did you ever consider the possibility that the bankers might be witches and warlocks? That would explain a lot, wouldn’t it?
Bad derivatives are just the 20th century version of the squinny. Bring on the rack. I am very earnestly angry and panicked about the possibility that the bankers are financial terrorists, out to bring down this coutnry. The sleazy asshole lawyer Graham said that made anything we do all right and A-OK.
Let’s see. Wall St. creates fancy “financial products”. Wall St. sells fancy “financial products”. Wall St. promises to pay fancy “financial products” if losses occur. Wall St. assumes losses will never occur. Wall St. has two used condoms as collateral for when losses occur. Losses occur. Wall St. pissed that Muslin’s want to change how “financial products” are managed going forward.
Seems logical to me. What’s for desert?
I am having trouble linking the image with the article in my mind, but my imaginary rabbit friend tells me that is a-ok!
Confucius have been warn of many thing.
Mr Blifil:
When you add in the value of socialist healthcare, you’ll earn $250,000 which will allow your taxes to be increased. But you will be able to afford the non-generic brand of Hobo Beans.
Maybe “saving is gay,” but also these homos KNEW they were too big to fail, which was a way better insurance scheme than all their credit default swap insurance schemes, which were of course not real insurance schemes but risky investing schemes. Maybe regulators should be worried about the “too big to fail” loophole and get back to not having a single industry called “financial services.”
“Curbs their profits?” Well, SCREW that then! Because without the highest profits possible life isn’t worth living. Better dead than merely obscenely rich.
Why should the banks be required to have any kind of reserves at all? The government has a printing press and lots of ink and paper. The government should prop up the banking system. And anyone who disagrees is a lousy Sociali…no, wait a lousy Facis… Hey, just exactly what are they, anyway?
This so-called collateral thing is just a big impediment to capitalism. I’m going to live to be a 192 and am pretty sure I’ll make about $2m per year until then (starting next year, or the next, latest). So don’t worry, I’ll be able to cover any and all of my debts… all you need is my say so. No, you don’t need to look at the current market value of my assets… valuation is all just someone’s opinion anyway.
Of course it’s going to curb their fucking profits if they, not the taxpayers have to cover bad bets. Yes, I know I’m stating the fucking obvious, but why would that reporter even write that stupid ass sentence?
Tommmcatt: I gave you your precious alt-text, and what do you say? OH I DON’T GET THE PICTURE. Well guess what? NEITHER DO I. There.
I have heard that one type of exempted derivative would be swaps of dealers’ future cash flows for bail money. Also derivatives where the underlying asset is one’s wife.
The pig poles are waiting, the guillotine is greased, why do the bankers still have heads with which to speak from?
If stockbrokers don’t have the freedom to gamble their clients’ money recklessly, we may as well all be living in a giant Gulag with razor-wire fences and guard towers. This is about our God-given right to trade on margin. It’s right there in the preamble to the Emancipation Proclamation: “We are endowed by our Creator with certain inalienable rights; that among these are life, liberty and the pursuit of arcane derivative vehicles on margin insured by credit-default swaps backed by dubiously-valued mortgage securities.” It’s practically one of the Ten Commandments.
Honestly, I think one of the biggest problems is referring to these things as financial ‘products.’ ‘Products’ are tangible things that are produced; they can be held in one’s hand, because they are real and exist. These complex things are not ‘products,’ because they are entirely imaginary, like the rabbit, and the more complex they get the more imaginary they become, like a rabbit flying a stealth bomber with a fancy hat on.
In conclusion, the way to solve the financial crisis is to stop referring to these things as financial products, and start calling them what they are, which is financial ass-fuckery.
If derivatives must go thru clearinghouses, how will people in the mold of Bernie Madoff continue to make money? Yeah, I know. They’ll steal it.
Anyway, what’s next, libtards? Licensed brokers?
Jim Newell: How about “Losses multiply like rabbits” or “Derivatives were invisible too!?
Why does Wonkette cover this better than the WaCIAgnton Post and NWO York Times?
By the same token it curbs Madoff’s profits when he is put in jail. No jail time for Ponzi schemes.
S.Luggo: Down with this “accountability” bullshit!
Putting money aside to pay the credit card bill for the shoes I just bought hurts my bottom line, too, fuckers. In fact it might just impact my ability to pay my mortgage and hence for my family to be a going concern. So I demand that Mastercard negotiate with me to reduce my debt so that the counterparty (Steve Madden) doesn’t get hurt.
I dare to ask a (somewhat) serious question - is there any way Hopey could give some stimulus love directly to Credit Unions, as a class of financial institutions, in the same way he did for the nationals Banksters?
Formerly Preferred: Can you prove a rabbit’s never flown a stealth bomber? Hmm?
What next an AI-RIBA ban?
WIDTAP: You beat me to Ponzi. But seriously, why should Madoff curtail his profits by keeping capital to repay his investors should they pull out?
And btw I am getting concerned about that Hayden-Harnett model in the ruffley swimsuit over there. She has been out in the sun in that ad for days now and her freakishly alibaster skin (that covers her scarily skinny legs) will blister.
I mean, I’m white, but I ain’t THAT damn white.
lmj: “Lindsay Graham, the stinking lying idiot turd”
So that is who told shirtless in Utah to run…
Socialists are furfags? Furfags are the power behind the throne? I know the score. The editors posted the picture to keep idiots like me from muddying up the actual discussion of regulating the derivatives market. The editors probably feared another humor sucking black hole of a comment that actually negates the funniness of other comments around it.
chascates: Regulate da Rabbit Ids To Prevent Global Collapse.
Meh… Derivative traders should be allowed to do what they want with their own money; I just object to them doing anything with my 401K.
Come to think of it, if manufacturing is the wealth-producing part of any economy, shouldn’t my 401K be used to pay people to make stuff, instead of make-up weird voodoo economics?
chascates: Hare 2day, gone 2morrow.
Obvs, our economy must collapse totally to the point where we’re trading pretty-colored rocks before traders and bankers will accept regulation. Then they’ll whine about having to maintain too big a supply of blue lace agate and pyrite.
Good thing rocks are edible and delicious. Mmmm..
Well, Harvey has overcome not only time and space, but any objections.
Formerly Preferred: The Russian word transliterates to “fuffle.” See Dmitry Orlov’s lovely essay, “Welcome to Fuffland”: http://cluborlov.blogspot.com/2009/03/welcome-to-fuffland.html
“Civilized society?” Have you not seen the precipitously low prices on utility vehicle testicles?
So, derivatives traders should be allowed to create infinite amounts of pretend money with which to “buy” things that they don’t actually buy before selling them, or the Bolsheviks win. Sounds fair.
They’re just bookies. Somebody at a very high level should point that out, repeatedly.
Barrett808: That’s perfect.
Since when was captalism replaced with Sociopathy?
“exotic financial contracts” , “dark markets” , “instruments known as derivatives” , “increasingly complex” ?
WTF is this shit?!
This isn’t something the SEC or CFTC should be meddling with.
We need motherfucking Jack Bauer
and an army of ninjas to break up this dark financial underworld.
To be fair, an exchange-traded instrument has to be standardized. Repos and reverse repos would have to flow through a clearing house daily, individuals would have to meet income and net worth requirements in order to participate, and someone would have to be willing to put their license on the line for settling these instruments.
Barings Bank was not undone by SLIMEX or OSE; Leeson was playing in unregulated forward markets that settled in futures.
All this crap is me saying unregulated trades belong to The Mob and The Mob only.
Lazy Media: They’re just bookies. Somebody at a very high level should point that out, repeatedly.
So true. And what happens to bookies who can’t make good? Just sayin’.
I saw Spitzer on Maddow’s show last night and even though I remember clearly the dickheaded thing he did, I say: All Is Forgiven. Seriously. Madoff’s wife, kids, and controller are walking around free as birds, not to mention practically every robber-CEO in America, and banks are still refusing to tell us what they did with our TARP money … and SPITZER is the one who lost his job?!?111? Let HIM throw the blue fireballs on the TV show. Then again, maybe the words Spitzer, blue, and balls shouldn’t be in the same sentence. But you get what I mean.
Say it’s Friday, circa 2006, and you happen to be in your unpretentious downtown bar, easing into a weekend of serious drinking when a klaven of douchenozzle traders enters and begins propositioning the unpretentious lesbians who happen to frequent your watering hole. Let’s say that. Let’s also say that the first thing out of their mouths is some shit about some amazing new crazy ass derivative or swap or whateverthefuck that their boss has invented–something so crazy, man, it isn’t even illegal yet, because they live on the edge and dontyouwannapartywiththem? Let’s say this because it happened all the fucking time.
I have an idea about this, which is that perhaps the government should, oh, say, hire some smart young women (and men!) to hang out with these idiots and their nefarious bosses in such places and in Greenwich and Stamford and wherever they congregate. These smart people would then, say, figure out what this crazy new thing is and then the SEC might develop a regulation for it before it had the chance to bring down the global fucking economy. The upside is that whatever inefficiencies there might be in such a system are compensated for by filling bars with smart young people who might learn to drink seriously and thus make the world a better place.
That is my idea about that.
What an excellent regulation plan … for FY-2004. Hoo boy - talk about locking the barn-door after the livestock has been converted into delicious nutritious burgers.
Everyone loves the Invisible Hand - until they notice it’s wearing a rubber glove with two fingers extended.
The Five Percent Nation of Harveymongers