Re: Constitutional question

Vince wrote:
Fred J. McCall wrote:
Arved Sandstrom <dcest61@xxxxxxxxxxx> wrote:

:On Thu, 25 Dec 2008 16:08:37 +0000, Vincent Brannigan wrote:
:
:> Arved Sandstrom wrote:
:>> On Thu, 25 Dec 2008 03:44:06 -0800, Jack Linthicum wrote:
:>> :>> [ SNIP ]
:>>> There is some evidence, not cited, that du Puy is no longer valid.
:>>> Time for all you constitutional scholars to suck up on your egg nog,
:>>> toddy, or Geratol and come up with an answer before Bush cinches his
:>>> role as the worst President, edging out Buchanan, Franklin Pierce and
:>>> William Harrison.
:>> :>> One's worst President depends upon one's philosophies. I'm no fan of
:>> Bush, but:
:>> :>> 1) this financial crisis is something that I doubt very much any other
:>> President would have anticipated any better...it was going to happen
:>> sooner or later on someone's watch...and it's not like only the US is
:>> to blame;
:>>
:>>
:> When you preach deregulation and appoint those devoted to destroying
:> regulation and you get a regulatory failure ITS YOUR FAULT
:> :> The derivatives market, the mortgage market and the subsequent meltdown
:> are regulatory failures. They did not have to happen any more than the
:> SEC did not have to screw up on Madoff of the FDA on the Sprint fidelis
:> lead. In every regulatory agency career regulators who tried to do their
:> job were overruled so often by GOP political actors that they got the
:> message.
:> :> Vince
:
:The repeal of the Glass-Steagall Act happened in 1999. It was a :bipartisan bill signed into law by Clinton. You're suggesting that Bush :should have had the financial acumen to see what very few others saw.
:

Yep. Biden voted for it. Pelosi voted for it. Reid voted for it.
Pretty much every big name in the Democratic Party leadership voted
for it.

Who didn't vote for it? John McCain. Yeah, this is all the
Republicans' fault....

Vinnie, as usual, is an idiot.



Horse ***


The Gramm-Leach-Bliley act itself has nothing to do with standing around with your finger in your rectum while the criminals plunder the store
Oh and BTW Phil Gramm was John Macain's economic advisor

and that was not the key act that allowed the disaster, it was another Gramm specialty



100 Year Crash: McCain advisor spurred $62 trillion derivatives market that will swamp global markets

Posted Sep 15th 2008 9:09AM by Peter Cohan
Filed under: Federal Natl Mtge (FNM), Politics, Lehman Br Holdings (LEH)

Lurking in the background of this weekend's collapse of two of Wall Street's biggest names, is a $62 trillion segment of the $450 trillion market for derivatives that grew huge thanks to John McCain's chief economic advisor, Phil "Americans are Whiners" Gramm. That's because in December 2000, Gramm, while a U.S. Senator, snuck in a 262-page amendment to a government re-authorization bill that created what is now the $62 trillion market for credit default swaps (CDSs).

I realize it is painful to read about yet another Wall Street acronym, but this is important because it will help you understand why the global financial markets are collapsing. And it will give you information to consider when you vote in November. CDSs are like insurance policies for bondholders. In exchange for a premium, the bondholders get insurance in case the bondholder can't pay. As I posted, in the case of the $1.4 trillion worth of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) bonds, the government's nationalization last Sunday triggered the CDSs on those bonds. The people who received the CDS premiums are now obligated to deliver those bonds to the ones who paid the premiums.

Gramm's 262-page amendment, dubbed "The Commodity Futures Modernization Act," according to Texas Observer, freed financial institutions from oversight of their CDS transactions. "Prior to its passage, they say, banks underwrote mortgages and were responsible for the risks involved. Now, through the use of [CDSs]-which in theory insure the banks against bad debts-those risks are passed along to insurance companies and other investors," wrote Texas Observer.

How does this relate to Lehman's bankruptcy? "[CDSs] were a key factor in encouraging lenders to feel they could make loans without knowing the risks or whether the loan would be paid back. The Commodity Futures Modernization Act freed them of federal oversight," according to Texas Monthly. And it was due to these CDSs that Wall Street held an emergency session yesterday to try to minimize the damage of Lehman's CDSs and other derivatives. Unfortunately, this session did not produce much thanks to the built-in lack of knowledge of the risks in these transactions that Gramm's legislation ensured.

You are going to be reading more and more about CDSs over the months ahead -- it will become as familiar as the phrase subprime mortgage was in 2007. Unfortunately, there were "only" $1.3 trillion worth of subprime mortgages and the CDS market is 48 times bigger than that -- and more than four times bigger than U.S. GDP. And since nobody has ever had to deal with this volume of CDS unwindings, it is impossible to calculate how much they will cost.

One thing is clear. If you think America is a nation of whiners and this is a mental recession, I strongly urge you to vote for McCain. But if you take a look at how much you are paying at the gas pump, how much of your retirement will be wiped out in the months ahead, and how you will pay all those bills as the unemployment rate climbs higher, it might be worth considering whether you can afford to elect a man who relies on Phil Gramm for economic advice.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

http://www.bloggingstocks.com/2008/09/15/100-year-crash-mccain-advisor-spurred-62-trillion-derivatives/print/






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