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.
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