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House Eases Restrictions On Derivatives

From a curiously forgiving Associated Press:

House scales back proposed Wall Street rules

By Jim Kuhnhenn, Associated Press Writer Fri Dec 11

WASHINGTON – House Democrats head into the final stretch on a long-awaited Wall Street regulation bill with two crucial and contentious votes looming before they can declare victory on one of President Barack Obama’s legislative priorities.

The sweeping regulatory overhaul aims to address the myriad conditions that led to last year’s financial crisis…

Prodded by moderates, however, nearly half the Democrats teamed up with Republicans late Thursday to loosen restrictions on derivatives and reject tougher regulations

Democratic leaders were also seeking to revive legislation that would let bankruptcy judges rewrite mortgages to lower homeowners’ monthly payments. A coalition of banking organizations on Thursday sent lawmakers a letter urging them to vote against the amendment. The House previously passed bankruptcy-mortgage legislation, but it failed in the Senate.

House Speaker Nancy Pelosi applauded progress on the bill Thursday.

"American families will no longer be at the mercy of the Wall Street in terms of their jobs, their homes, their pension security, the education of their children," said Pelosi, D-Calif.

Later that evening, scores of Democrats strayed and voted with Republicans on amendments that eroded the reach of proposed regulations on complex derivatives trades.

Democratic attempts to toughen the legislation failed.

Though not major setbacks, the votes illustrated the difficulties facing House Financial Services Committee Chairman Barney Frank and the Obama administration as they seek to pass the most ambitious rewrite of financial regulations since the New Deal

The legislation still imposes restrictions on derivatives, aiming to prevent manipulation in and bring transparency to a $600 trillion global market. An amendment by New York Democrat Scott Murphy, adopted 304-124 Thursday night, exempted businesses that trade in derivatives, not as financial speculators, but to hedge against market fluctuations such as currency rates or gasoline prices. The amendment also provided an exception for businesses that are not considered too big to be a risk to the financial system.

A Democratic effort to make more companies subject to derivatives regulation failed 279-150

In typical fashion the earlier headline for this article was more accurate: “House eases restrictions on derivatives trades.”

Obviously, the AP must have realized that it was a little too revealing.

After all, we were told not that long ago that derivatives, like bonuses, represented everything that was wrong in our corrupt capitalist system.

But suddenly all that is forgotten now.

This article was posted by Steve on Friday, December 11th, 2009. Comments are currently closed.

3 Responses to “House Eases Restrictions On Derivatives”

  1. tranquil.night says:

    Steve you pretty much have this one wrapped up.

    I’ve come to learn that statists sound like Conservatives in campaigns, preach Communist ideology and policy to boil class anger, yet when it comes to implementing policy – they’re nothing but a bunch of greedy socialist elitists trying to rig every aspect of the Capitalist system in their favor.

    This is no loss to the agenda. They’ve already got what they wanted – which was control – over this sector. Now, just like all the other institutions they infect, the corrupting begins – wage controls, backbreaking regulation and tax, and weird partnerships with organizations like ACORN designed to rescue people from foreclosure (but only if they pay membership fees!)

  2. proreason says:

    Mr Soros and Goldman Sachs need derivatives for those periods of time when their illegal market manipulations are temporarilly disallowed.

  3. GetBackJack says:

    This ought to turn out ought well.

    If you own stock in mobile home dealers and funeral parlors.

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