“American Casino… has the power of a haymaker that somehow sneaks up on you. It’s a nightmare that starts like a normal daytime drive and ends in a vortex-like sinkhole,” writes Michael Srager in the Baltimore Sun’s print edition “It’s a nightmare that starts like a normal daytime drive and ends in a vortex-like sinkhole.”
Those who respect the law and love sausage should watch neither being made.
–Mark Twain.
AMENDMENT TO THE PETERSON SUBSTITUTE FOR
H.R. 3795 (a)
OFFERED BY MR. PETERSON OF MINNESOTA (b)
Page 21, after line 25, insert the following:
(19) by adding at the end the following:
‘‘(50) ALTERNATIVESWAP EXECUTIONFACIL-
ITY. (c).—The term ‘alternative swap execution facility’
means a service that facilitates (d) the execution or
trading of swaps between two persons through any
means of interstate commerce, but which is not a
designated contract market (e), including any electronic
trade execution or confirmation facility (f) or any voice
brokerage facility (g).’’
(a) Everyone agrees that the unregulated “dark markets” of Wall Street’s trading in over-the-counter derivatives such as credit default swaps moved the financial crisis from major problem to total disaster. Currently, most trades in these “products” are privately negotiated on the phone, dealer to dealer. It’s appallingly risky – that’s why we have a multi trillion dollar bailout. But because the dealers at major banks can quote different prices to different customers, with huge spreads between buy and sell quotes, the banks are making huge profits and want to keep it that way.
So while congress is busy working on reform legislation, Wall Street’s lawyer-lobbyists in Washington are working hard to neutralize such efforts.
Who’s winning? Over lunch across town from Capitol Hill, I recently asked that question of a very smart attorney endowed with deep experience in keeping Washington safe for Wall Street. In answer, he pointed to this seven-line paragraph buried in a 26 page amendment to “HR 3795, Over-The-Counter Derivatives Markets Act of 2009,” passed in a voice vote by the House Agriculture Committee the night before. Following the vote, the committee had issued a press release hailing their vote for “strengthening” regulation.
On the contrary, said my friend, “I guarantee you that not a single member, and almost certainly no one else, apart from the traders on Wall Street and the lobbyist who inserted it on their behalf, understood the significance of this paragraph. It means that nothing will change.”
(b) Colin Peterson (D-MN) is the Chairman of the House Committee on Agriculture. He is on record as asserting “The banks run this place…It’s huge the amount they put into politics.”
(c) An “alternative swap execution facility” is intended by the original drafters of the bill to be a new, fully regulated market for trading over-the-counter derivatives – a technologically enhanced version of the various futures exchanges currently operating, such as the Chicago Mercantile Exchange, where transactions and prices are open for all to see.
(d) A beautiful word. Now the “execution” facility doesn’t have to be an actual exchange. It has just been redefined as merely something that “facilitates” the execution of a swap trade.
(e) Reinforces the point that a “facility” does not have to be one of those transparent exchanges. But wasn’t that what the bill is meant to make happen?
(f) In 2005 the major swaps dealers, under pressure from the New York Fed, set up an electronic “confirmation facility” to keep track of trades, which the dealers control. Not much openness here.
(g) “Voice brokerage.” This means a telephone, as used by a dealer setting prices that are not publicly disclosed. That’s what the dealers were doing the last time they led our financial system over a cliff, and that’s the system that is preserved by this one little paragraph.
Fresh Air’s John Powers reviews American Casino:
“Following E.M. Forster’s old command — “Only connect” — this smart, touching documentary traces the connections between Wall Street’s high-flying practices and the countless citizens on Main Street who now face bankruptcy and eviction”
Read or Listen to the full review here.
Starting Sunday, October 25, the bankers will hear the people. Click here for all the news and details.
Even while we the taxpayers spend trillions to bail out the banks that brought us to ruin, they are at it again — looting the casino at our expense. David Einhorn, a very, very smart hedge fund player who made a lot of money by correctly predicting the downfall of Lehman Brothers, recently pointed out “Even as the government spends trillions to subsidize mortgage rates,
the resulting discount is not being passed to homeowners but is being kept by mortgage
originators who are earning record profits per mortgage originated. Recently, Goldman
upgraded Wells Fargo partly based on its ability to earn long-term oligopolistic* mortgage
origination spreads.” Here’s a pdf of the speech
*Oligopoly: A situation in which a particular market is controlled by a small group of firms.
By ANDREW COCKBURN
Smart investors have certainly had plenty of opportunity to make money lately. Gold is up twenty percent. Oil has doubled. The Dow roars through 10,000. But one investment has far, far, outperformed all others in epic returns: politics.
Wall Street balance sheets make this very clear. Last year, according to the Center for Responsive Politics, major banks and other financial institutions in receipt of $295 billion in TARP money pumped $114 million into Washington in lobbying and campaign contributions. As a stand-alone figure, $114 million sounds like a lot. Set against the torrent of cash flowing in the opposite direction, it is minimal. At 258,449 percent it has been called “the single best investment in history.” Our elected representatives are giving it away.
Read the rest here
Learn just what an incredible investment return banks made on their Washington lobbying $$. Bank of American 309335%! Learn the full details here
Banks have been furiously lobbying Congress to weaken the powers of the new proposed Consumer Finance Protection Agency. Their efforts have born fruit. In a recent press release the American Bankers’ Association hailed the House Financial Services Committe, led by Barney Frank, for removing “the unworkable requirement that communications with consumers be ‘reasonable’.”
You really could not make this stuff up.
Lincoln Star-Leger promotes Casino. Read full review here.
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American Casino presented by Table Rock Films, produced by Leslie and Andrew Cockburn
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