<object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/nRp0UrAmNCs&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/nRp0UrAmNCs&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object> Obama basically wants to limit bank investments into 2 things. Loans and T-Bills. Banks getting 0.25% interest loans from the Fed using them to buy T-Bills with those loans. For some reason, Obama is wanting the Treasury to borrow more money from the Fed, using banks as the middlemen. I wonder what all this T-Bill money is being spent on.
It's my understanding that for each member of congress there were 8 special interest people put in place to have a say in the Health Care Bill. Now, with the Financial Reform legislation debate, there are 25 special interest people to each member of congress in place.
I think the derivatives they're most concerned about regulating are the ones that aren't traded on exchanges -- credit default swaps and such. So far as options on stocks, indexes, or futures go, some people lost a bundle during the crisis and some made a bundle, but nobody defaulted and asked for a government bailout. Of course that won't stop them from trying to "regulate" us with a transaction tax.
After what happened during the financial crisis, I don't understand how anyone can think that regulating derivatives is a bad thing. Just because Obama is suggesting it doesn't mean it isn't right.
They want OTC derivatives like CDS contracts to be standardized and traded through a clearinghouse etc.. just like Equity options are today. Interestingly enough Republicans are 100% against transparency in the CDS markets.
This is the ONLY reason the health-care bill passed. There was no amazing political finesse. The country was against it, the Dems were united in their stupefaction with the idea in spite of towering deficits and towering reality, and the GOP were in a near-historic minority
The problem is that we had people like former GOP Senator from Texas, Phil Gramm de-regulate Credit Default Swaps in the "Commodity Futures Modernization Act of 2000" - - - legislation that had no public hearings, no recorded vote, and got spearheaded by Phil and most of his midwestern GOP buddies. This legislation negated the opportunity to essentially make "side-bets" like the "bucket-shops" did that lead to The Panic of 1907. So basically, Phil helped overturn regulation that had been around for 93 years. And yes, this is the SAME Phil Gramm who is married to Wendy Gramm, the former Chairwoman of the CFTC (1988-1993) who went on to become a board member at Enron, serving on (of all things) the Audit Committee!