The Independent (UK) has yet another story on the lobbying efforts by Wall Street to block new regulation. The banks are eager to stop any regulation because heaven forbid they are forced to produce real, honest profit. They still want to play games and cash in. They were rescued without strings which is without a doubt, something they would never do with their own clients unless forced. Banks felt very little pain from the meltdown so of course they are ready to launch a new bubble. They’ve learned that no matter what they do, regardless of how phony the deals are they will still get paid.
Just because hundreds of thousands of their colleagues have been sacked, they don’t care. The ones who are still there have learned nothing and are ready to do it again. If only there weren’t so many members of Congress who are equally greedy and ready to help them do it again as well.
Wall Street firms – acting alone, through trade associations and newly formed industry lobbying groups – have been pressing sympathetic Congressmen to consider the impact of tough new restrictions on the efficiency of markets and the ability of firms to create innovative new products.
In particular, they are trying salvage as much of the over-the-counter (OTC) derivatives market as possible, in the teeth of the Obama administration’s determination to force most derivatives products to be standardised and traded on exchanges. Trading bespoke derivatives contracts, such as credit default swaps, between banks, without an exchange, is more lucrative.
The Commodities and Futures Exchange, which currently regulates derivatives traders and markets, promised last week to enforce strict oversight rules, and it is believed to be considering curbs on the size of positions speculators can take.
In a note to clients, Barclays said: “Given the last few weeks have heralded the return of increasing levels of risk appetite – a positive turnaround following the grave concerns about economic discontinuity – any misguided regulatory policy may act against improving financial market conditions.”
As much as everyone would like to see improvements in their investments and retirement plans, the last thing we need is to have a new bubble with actual results that will be there tomorrow. Everyone outside of Wall Street has had enough of pumping up numbers that pump up bonuses but then disappear in thin air. Real money, please. Enough with this garbage already.