Congress Moves to DEREGULATE Wall Street

The best part of this story is that Wall Street is, of course, anything but regulated. Nevertheless, the minuscule rules that do apply to the nation’s financial oligarchs are apparently just too much to bare.  It doesn’t seem to bother Congress that the TBTF banks are actively involved in offshore payday lending schemes with rates well over 500%, or that they destroyed multiple municipalities across the nation selling swaps, including picking away at the carcass of the once strong Detroit.  Nope, all that matters is that Congress’ pockets are lined with Federal Reserve Notes.  As expected, this is a bipartisan effort.  From the Huffington Post:

WASHINGTON — A bipartisan cadre of House lawmakers will move on legislation to deregulate Wall Street derivatives Wednesday, less than a week after Sen. Carl Levin (D-Mich.) released adevastating report on the multibillion-dollar derivatives debacle at JPMorgan Chase.

“It is incredible that less than a week after new JPMorgan Whale hearings detailed how the bank’s London office piled up risk, hid losses, and dodged regulatory oversight, that some House members are again supporting the weakening of derivative safeguards.”

It’s not incredible Carl, it’s called payoffs.

Yet in an era of partisan gridlock in the nation’s capital, Democrats and Republicans have come together to repeal or weaken those rules. Although Obama may not want to sign a standalone package of Wall Street deregulation into law, bipartisan legislation could be inserted into a broader bill that the president might find difficult to reject.

I’m sure it’ll be real difficult for Barry to sign.  About as gut wrenching as signing the NDAA.

At a congressional hearing last week, Wallace Turbeville, a former Goldman Sachs banker and current senior fellow at the public policy group Demos, testified on behalf of Americans for Financial Reform that exempting utilities from the rules would ultimately help Wall Street firms profit at the utilities’ expense.

“I had the uncomfortable opportunity to witness sales calls by derivatives specialists on governmental utilities,” Turbeville said. “I have seen the technique of fostering a sense of trust, encouraging an advisory relationship that can be exploited to sell an immensely profitable derivative when other alternatives could be better.”

The bills to be considered Wednesday also include legislation from Rep. Jim Himes (D-Conn.) — another Goldman alum — that would roll back Dodd-Frank’s ban on taxpayer support for some kinds of derivatives trades. Himes has defended his bill as a way to ensure that more regulators oversee derivatives, though the measure is opposed by the Americans for Financial Reform.

I’d actually laugh out loud if the above wasn’t so pathetically tragic.

Another bill would force the Commodity Futures Trading Commission, a regulator with derivatives responsibility, to conduct economic cost-benefit analyses for new agency rules using guidelines that would be more favorable to Wall Street banks. If the proposed rules failed the test, they could not be imposed.

There is zero doubt in my mind that the “cost-benefit analysis” will be conducted with as much vigor as a Cyprus bank stress test.

Oh, and I encourage you to email all the traitors pushing these bills.  In particular, Goldman Sachs mercenary Representative Jim Himes.  I couldn’t find a public email for him, but here are some options.  He has three offices.  Of course, it’s Connecticut.

His Twitter is @jahimes

Bridgeport Office

211 State Street, 2nd Floor
Bridgeport, CT 06604
Phone: (866) 453-0028
Fax: (203) 333-6655
Hours: M – F 9:00 am to 5:00 pm

Stamford Office

888 Washington Boulevard, 10th Floor
Stamford, CT  06901
Phone: (866) 453-0028
Fax: (203) 333-6655
Hours: M – F 9:00 am to 5:00 pm

Washington, D.C. Office

119 Cannon House Office Building
Washington, D.C. 20515
Phone: (202) 225-5541
Fax: (202) 225-9629
Hours: M – F 9:00 am to 6:00 pm

Full article here.

In Liberty,

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 Add your comment
  1. Hi Mike,

    Can you explain why this deregulation is a bad thing? It seems to me this is a step in the right direction toward more liberty and a freer market?

    Don’t you think that investors should take responsibility for and bear the risk of their investments (unless they were misled or defrauded)?


    • Michael Krieger

      Simple, when the banks are allowed to fail then I’ll have a debate on de-regulation. When they are allowed to create a market they can’t support and then get bailed out I don’t. If we didn’t have TBTF I would consider another approach. You can’t have free markets for the serfs and socialized markets for billionaires.

    • Got it. I thought that might be your answer.
      Thanks for your quick reply!

  2. Hi Mike,

    Can you help me understand why this deregulation is detrimental to liberty and the free market?

    Should investors take responsibility for and bear the risk of their investments (unless they were misled or defrauded)?


    • Would you be willing to invest in a market where for example insider traiding is deregulated (allowed?). There are certain rules that require the markets to be fair to everyone. Deregulating those is a big mistake yet that’s what some deregulation proposals are all about.

    • a free market needs rules to be free. Getting rid of the rules of the game does not make the market more ‘free’.

    • In America everyone but the rich are “free” to lose their money on investments and the majority are “free” to expect no gains from any part of economic growth and “free” to be wage-slaves all their lives.

    • I agree with you on a certain level. Shouldn’t those rules be the constitution and the contracts between the individuals engaging in voluntary transactions?

  3. Some great truth telling in these articles. They make me wanna shut-up and read!

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