Showing posts with label Captains of Industry Are Jesus. Show all posts
Showing posts with label Captains of Industry Are Jesus. Show all posts

Tuesday, June 28, 2011


There's been a lot to talk lately about how President Obama's economic policies are causing uncertainty. This is the reason conservatives are pointing to when defining our sluggish economy. Stirring up phantom fear is nothing new for them so it's not surprising to me whatsoever. And I still can't figure out how less regulation is going to help our economy to take off after less regulation nearly destroyed it. The facts are there. Some people don't want to listen.

But if you want to talk about the unknown, here is an article for you that I save from late last year. It also explains how less regulation was (and still is) a large part of our problem.

The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.

Really? I wonder why?

Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer’s home heating-oil company in Westchester County, north of New York City.

This fall, many of Mr. Singer’s customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.

But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices — and his customers’ prices — could be, he says, because banks don’t disclose fees associated with the derivatives.

“At the end of the day, I don’t know if I got a fair price, or what they’re charging me,” Mr. Singer said.

But wait...I thought that the free market took care of every one.

The marketplace as it functions now “adds up to higher costs to all Americans,” said Gary Gensler, the chairman of the Commodity Futures Trading Commission, which regulates most derivatives. More oversight of the banks in this market is needed, he said.

Wait...huh? More regulation? That can't be possible!!! I'm afraid I don't understand.

I thought that in the free market we had a choice about all this stuff and this article not only says that we don't but members of these private banks set the rules and make the choices for us.

Well, at least I can rest comfortably knowing that Dodd Frank is in place and the GOP, ever the supporters of the middle class working man, will make sure that fairness rules the day.

Mr. Gensler wants to lessen banks’ control over these new institutions. But Republican lawmakers, many of whom received large campaign contributions from bankers who want to influence how the derivatives rules are written, say they plan to push back against much of the coming reform.

Or not.

The simple fact that no one knows how far and deep the derivatives market goes is an uncertainty that should be scaring more people. But since there's a lot of money involved and everyone's rich, there's no way it could be their fault if anything goes wrong again.

No fucking way.