Dodd-Frank Fiasco: Now on hook for derivatives market


Warren Buffett famously called derivatives financial weapons of mass destruction. That was before they detonated, propelling the financial system toward the brink of collapse. Then, as part of the Dodd-Frank law meant to prevent future crises, Congress last year demanded a new system of regulation for the financial instruments. Washington Post. Where is Mr. Dodd? Mr. Frank, could you explain please?

Now the The Wall Street Journal has an editorial on the new bailout powers from Dodd-Frank:

Only seven months too late, official Washington is starting to acknowledge flaws in the architecture of the Dodd-Frank law passed last July. Tuesday, for example, Federal Reserve Governor Daniel Tarullo admitted in testimony to the House Committee on Financial Services that by forcing much of the derivatives market through central counterparties, the government would now be creating new too-big-to-fail institutions and new potential sources of systemic financial risk.

Somehow this wasn’t one of President Obama’s talking points last year, but yesterday Mr. Tarullo said the government would have to watch these new entities very closely: “This heightened oversight is important because financial market utilities such as central counterparties concentrate risk and thus have the potential to transmit shocks throughout the financial markets.” Oh, and because these “utilities” are backed by the government, taxpayers will end up paying if they fail.

The Fed Governor added that the Federal Reserve Board “also was given new authority to provide emergency collateralized liquidity in unusual and exigent circumstances to systemically important financial market utilities. We are carefully considering ways to implement this provision in a manner that protects taxpayers and limits any rise in moral hazard.”What this means is the Chicago Mercantile Exchange can take huge risks and know the Federal Reserve will bail them out.
From: News Alert:
Of course you guessed who’s the board of directors of the Chicago Mercantile Exchange? None other than Chris Dodd’s wife. Did Rahm Emanuel, as Obama’s Chief of Staff, push for a new Fed powers to bailout the CME because he used to be a CME board member?

And it gets  better! Recall our post regarding the merger of the New York and European stock exchanges:  New Yorkand European stock markets merge.. so I have to ask, will we soon be on the hook for a foreign controlled derivatives business?  How long before the Chicago Board merges as well?
The derivatives business of NYSE Euronext and Deutsche Boerse alone would then be worth $24.7 billion, based on the average valuation for options and futures exchanges, more than the companies’ combined capitalizations before the talks were announced this week. The deal shows how lucrative derivatives have become for trading venues, producing operating margins as high as 55 percent. By creating the world’s largest futures exchange that also controls 40 percent of U.S. options, the new entity would offset revenue declines in equities trading. Bloomberg

What is the EPA..just an Activist Group?

There comes a point when one has to ask how much “protection” is reasonable for the Environmental Protection Agency.These unelected bureaucrats seem to have unlimited authority. Conservatives on Fire raises some great questions over at his place:

Has the EPA Become Just Another Environmental Activist Group?

What I find mind boggling in all this is the new investigative technique that the EPA has developed, which as best as I can discern goes like this: first they start out with the conclusions they want to prove and then work backwards to prove their conclusions and any data the doesn’t fit is ignored. Lovely!

So, you tell me. Has the EPA become just another environmental activist group?

He goes on:

 The Washington Examiner recently ran this story by Mark Tapscott, “Emails, other documents show EPA in bed with Big Green groups”.  Mr. Tapscott introduces his subject with this:

A U.S. Environmental Protection Agency official crowed about his agency’s decision to issue an emergency order stopping a natural gas drilling operation in Texas to Big Green environmentalists before informing state officials of the action, according to emails and sworn statements obtained by Energy in Depth (EID).

The emergency order was issued despite objections from an EPA scientists that there was insufficient data available to justify it. 

“[T]his is not conclusive evidence because of the limited data set,” said EPA scientist Dr. Doug Beak in an internal memo to agency colleagues.

“The only way now to compare the data would be to make assumptions to fill in data gaps and I don’t believe we have enough experience at this site or data to do this at this time,” Beak said.

Rest of his story here Conservatives on Fire. Well worth the visit. He has a great place.  


Senator Santorum Talks About his Google Problem

Every day one learns something new. My educational process apparently missed this gem, or should I say jewel?? Frankly, I find former Senator Santorum a pompous ass and a one trick pony. I know about him because he is from Pennsylvania and we long ago dispatched him from the Senate. Why he thinks he should be running around thinking he might be President only highlights what pitiful candidates we have. So google away with “Santorum” and have an educational moment. On second thought, please don’t. His team calls on Rachael Maddow to the rescue. Google….how did this manage to get this to the top of your hit list? Here tis:

Santorum can only hope voters don’t turn to Google, the world’s most popular Internet search engine, to learn more about him.

Try it for yourself: Enter “Rick Santorum” into Google. In a fraction of a second you’ll have hundreds of thousands of results. But two of the top four cite a graphic definition for a sexual neologism. In this case, the neologism is a reference to anal sex.

“It’s just a sad commentary,” Urban told Roll Call. “You want to talk about incivility. I don’t know of anybody on the left who came to my defense for the incivility with respect to those things.” Urban called on liberal leaders to do just that:

“If somebody had a website up that maligned somebody who wasn’t a white, Christian, conservative, male, Rachel Maddow’s head would explode,” he said. “Where’s Rachel Maddow on this?”

Santorum himself sounded slightly defeated when asked about it recently.

“It’s one guy. You know who it is. The Internet allows for this type of vulgarity to circulate. It’s unfortunate that we have someone who obviously has some issues. But he has an opportunity to speak,” Santorum told Roll Call.

From: Roll Call

H/T The Agitator

Egypt: Islamist judge to head constitution committee

Here we are in the 21st Century Egypt

Here we are in the 21st Century Egypt

No real surprise here. We know how Egypt feels about Sharia law. Yet the MSM continues the drum beat that Democracy is just arround the corner. Women have much to fear. So here tis for another feel good story about how great the dissidents were/are. Google and the State Department, you keep at it. Keep in mind there are over 80 million Egytpians. A couple hundred thousand who were rioting in the street do not make up the majority. A reminder: Majority of Egyptians want Sharia law

Wael Abbas, the best-known human rights blogger in Egypt, who was sentenced to prison by the Mubarak regime last year, said it was a “worrying” choice.

“There is no such thing as a moderate Islamist,” he said. “We want a secular state that respects all religions and which belongs to all religions.”

(Telegraph)Egypt’s new ruling military council has appointed an Islamist judge to head the committee drawing up a new constitution, angering some of those who argued last week’s revolution would deliver the country to the Muslim Brotherhood.

Tarek al-Bishry, the chairman of the constitutional panel, is a respected judge who criticised former president Hosni Mubarak and is regarded as moderate in his views. But he has been associated with Al-Wasat, an offshoot of the Brotherhood.

He has selected a committee made up mainly of judges and politicians, including a judge who is a Coptic Christian, but also a former Muslim Brotherhood MP. There are no women.

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