Politics
Out of context: Reply #12050
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- ukit0
@tommyo
That still doesn't make much sense IMO. You are completely ignoring the fact that the REASON things got so out of control is because of laws passed by the Republican Congress back in the late 90s. Those are still the laws on the books today BTW.
The first was the Gramm-Leach-Bliley Act (put in place by Phil Gramm, who has close ties to the Enron scandal). That law tore down the walls between banking, securities and insurance companies, essentially allowing them to merge and become "too big to fail."
The second was the Commodity Futures Modernization Act, which deregulated credit default swaps and other derivatives by reducing the capital requirements needed for these kind of securities.
"The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that clarified most over-the-counter derivatives (“OTC derivatives”) transactions between “sophisticated parties” would not be regulated as “futures” under the Commodity Exchange Act (CEA) or as “securities” under the federal securities laws. Instead, the major dealers of those products (banks and securities firms) would continue to have their dealings in OTC derivatives supervised by their federal regulators under general “safety and soundness” standards. “Functional regulation” of derivatives products by the Commodity Futures Trading Commission (CFTC) was rejected"
Although hailed by the PWG on the day of congressional passage as “important legislation” to allow “the United States to maintain its competitive position in the over-the-counter derivative markets”, by 2001 the collapse of Enron brought public attention to the CFMA’s treatment of energy derivatives in the “Enron Loophole.” Following the Federal Reserve’s emergency loans to “rescue” American International Group (AIG) in September, 2008, the CFMA has received even more widespread criticism for its treatment of credit default swaps and other OTC derivatives."
That's exactly the reason CDSes became so widespread. So I don't really get what you are saying. We are gonna have regulation, one way or another, just like you are going to have laws governing every industry. It can be old regulation that is too weak like we currently have, or something that fixes the problem. But saying that because the Republican Congress (and yes, Bill Clinton and ironically Larry Summers) made a mistake before in being TOO willing to scrap existing protections, that we should just stick with that, seems pretty silly to me.
- Okay let me say this as plainly as I can..mathinc
- Regulations are well and good.mathinc
- But relying on regulations to save us from future pains from new molestations of the market, is idiotic.mathinc
- The system is flawed.mathinc
- and all I see from some of you is that the Bush deregulations caused this.. of course you're going to say this.mathinc
- OK, you're right, life is not perfect, I don't know what takeaway there is from that though.ukit
- The problem with this thinking is that the problem is that regulations don't close future loopholes.. the only way to do thatmathinc
- Actually they were mostly Clinton era...but passed by the Republican Congressukit
- that is to OVERSEE the practices of the market. Watch for people to exploit loopholes, analyze them, close them if they're too dangerous. Get it?mathinc
- ukit if you're going to be a combative cunt and not separate your love of the word 'regulation' with reality then there ismathinc
- nothing more I can offer. Just try and understand what I'm saying here.. Oversight vs. Regulation.mathinc