Is the Fix in on Derivatives?
By louisehartmann
It looks like the fix is in.
It's being reported that Democrats are plotting to remove Blanche Lincoln’s crucial provision to basically outlaw the trading by banks of naked derivatives - what Warren Buffett called "financial weapons of mass destruction" that have brought the world to the brink of disaster while making a few dozen banksters into billionaires - from the financial reform after her primary on Tuesday.
1030 commercial banks in the US trade derivatives but 5 banks, JP Morgan Chase, Citigroup, Goldman Sachs, Bank of America and Wells Fargo control 97% of all the derivitive trades.
Those 5 banks hold assets of more than 60% of US GDP, 8.6 trillion dollars. That's not just too big to fail, that's monopoly capitalism and monopolies like this lock out competition and destroy markets.
Robert Reich calls her provision the "biggest battle of bank reform." This battle is about if firms trading derivatives will continue to have their assets insured by the Fed.
Under Lincoln’s proposal, the traditional commercial banking business would be insured by taxpayers while the more risky derivatives business would be spun off. Watch what happens to Blanche Lincoln's amendment after the Tuesday primary.
If it suddenly vanishes then the whole thing was just a very cynical kabuki theatre perpetrated on the American people by the Democrats with the wink-wink-nod-nod of the bankster owned Republicans.
Comments
#2
This has been the play all along.
It's why progressives ought to pause about re-electing Harry Reid.
If this guy gets re-elected we can kiss any reforms that benefit ordinary Americans bye,bye.
We need grass roots progressives not Corporate progressives in the congress.
#3
Harry Reid is the guy who has been doing this behind the scenes.
And we ought to get rid of him once they pull this scam.
This was done purposely to mislead the progressive community.
#4
It just doesn't seem as if there is anything on the up and up anymore. Congress doesn't even do the job they were created to do according to the constitution. Money is their job, not the federal reserve or any big bank. They are too busy trying acting all big and bad to realize who they actually work for.
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#5
Frameing the question. The banks are gaining. To an extent they are infusing cash into the domestic sector but also to a measuarble extent they are realizing gains being promoted as "recovery" by betting / shorting in the global market in the negative, an ongoing bear market. Prospering out of gaining from the down side in other words,------ promoting the down side in further words.
Short term profit to be sure but long term you have a dragon chewing on it's own tail.
Seems to me they have it right but only to the extent they know when to head for cover and I expect we'll see more of that soon enough. Hopefully the experience will be harrowing enough for those that survive they will change their ways abruptly, the rest get dashed on the rocks, $#!+ happens, you play you pay.
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If the fix is in here, the fix is in to keep Bill Halter out of the Senate. This is a sad legislative practice where so-called moderates, like Blanche Lincoln, put in weak progressive amendments with a plan to trade them away later, just to be able to say they voted for some reform when they are up for election. I am sure the Democratic leadership had their choice of financial reform proposals and they chose Lincoln of all people. Very much like all the Senate healthcare machination where the reform was consistently weakened and the benefits to the corporations grew all through the process. It's more like constant re-runs of the same Itchy and Scratchy cartoon than any kind of professional theater, unless the villians always win in kabuki theater.