Yes, monsters they [ Summers & Geithner ] are.

C’est la guerre.

maybe we should start demanding that Obama let Stiglitz, Roubini and Krugman (for starters) have a voice in developing the financial planning.

It would indeed be interesting to listen in on a meeting of those with Geithner, Summers, Romer and Orszag. I’d almost pay to hear that (if I had any money left).

The reason why we don’t have real transparency in any of this is because such transparency would show that the banks are bankrupt and riven with fraud.

I know everybody wants to know what’s going on and whether we’re making progress. I too want to see the foreclosure rate decreasing.

However, it’s sort of like the old adage of watching legislation in the making being somewhat like watching sausage being made — nobody really wants to see it, they just want the end product.

I think one problem with transparency is that a lot of people would throw up because they would see some short-term activities which are revulsive and they might not get that it (hopefully) is leading toward a resolution of the problems. [ I say this speculatively and with hope. ]

is clinton responsible for the repeal of glass seagal or could he have done anything to prevent it’s repeal

The Republicans controlled Congress and would have probably overridden a veto. But, that repeal is clearly NOT the biggest factor in this crisis. Where it enabled stupidity was in letting banking or insurance funds be used for the more risky type activities usually reserved to hedge funds or investment banks. There needs to be clear separation or complete separation a la Glass-Steagal (sp).

We need regulation soon and it should include some very large granularity things like fixing that separation of “investment” activities, regulation or banning of credit default swaps, banning of naked credit default swaps, banning splitting assets (as mortgages were in CDOs), putting limits on mortgage offering (as it has existed for banks) by any kind of lender, perhaps limits on some kinds of use of leveraging, passing the bankruptcy bill to let people get out from under dangerous mortgages and a ban on adjustable rate mortgages (ARMs).

Separately it would seem to make sense that golden parachutes and any large benefit to a corporate CEO who drives his company into the ground should be banned.

I may be overlooking one or two things, but these are biggies.

Probably “Maiden Lane” because that’s where the NY Fed is located. I forget the exact street address, but it’s on Maiden Lane in the financial district.

It also appears they’re protecting the maiden’s reputation by turning Citigroup into a harlot. But look, the harlot was profitable the most recent quarter! Will the maiden ever get off her butt and start making some money for Uncle Sam? …wink wink nudge nudge.

re the CFMA, i wrote a diary on that one too: Which Idiot Decided Not to Regulate Credit Default Swaps?.

i don’t understand how that motherjones article can be the whole story because gramm wasn’t on the conference committee so how exactly did he “sneak” it in? furthermore ewing explained it’s inclusion from the house floor just prior to the vote and i don’t know how any senator can complain about it being “snuck” in anywhere when they approved the bill by UC before it was even brought to the senate floor. and as press accounts from that time show, it just wasn’t a big secret.

i know this only because i actually went back and for the days in questions watched hours of archived cspan video, read hearing transcripts, nyt articles, etc. now maybe i have it wrong, but if that’s the case i want good evidence from primary sources.

here is the relevant bit from my timeline (see the original for all the links and lots more info prior to this bit):

December 14, 2000 – The “Commodity Futures Modernization Act of 2000″ was introduced by Thomas Ewing, (cosponsored by Tom Bliley, Larry Combest, John LaFalce, and James Leach) in the House as H.R.5660 – “To reauthorize and amend the Commodity Exchange Act to promote legal certainty, enhance competition, and reduce systemic risk in markets for futures and over-the-counter derivatives, and for other purposes.”

December 15, 2000 – S.3283, was introduced by Senator Lugar (cosponsored by Peter Fitzgerald, Phil Gramm, Chuck Hagel, Tom Harkin and Tim Johnson) .

Negotiations on Omnibus Spending Bill Conference Report for H.R. 4577, the “Consolidated Appropriations Act 2001″, continued through most of the day. In the Senate, apparently Senator Biden threatened to filibuster the bill unless authority for Amtrak to issue tax credit bonds for capital improvements was included and much of the discussion on the Senate Floor involved this issue.

At 4:48pm the conference report for H.R. 4577, H. Rept. 106-1033, was filed. In a statement from the House floor, just prior to the vote, Representative Thomas Ewing briefly described H.R.5660 and it’s inclusion in H.R. 4577. The video of his statement is available in CSPAN’s archives. The conference report on H.R. 4577 was passed 292 – 60 at 6:38pm. Democrats voted 157 to 9 and the Republicans 133 to 51 in favor of passage.

In watching the CSPAN archive for December 15, 2000 (Senate and House), it appears that the bill was agreed to by unanimous consent before the Senate had even received the conference report. At 5:48pm:

Mr. LOTT. Mr. President, I ask unanimous consent that not withstanding the receipt of the papers, the Senate now proceed to the debate relative to the appropriations conference report and that there be up to 40 minutes for explanation to be divided between the two leaders, with 45 additional minutes under the control of Senator GRAHAM of Florida, an additional 20 minutes under the control of Senator BYRD, and an additional 10 minutes under the control of Senator SPECTER. I further ask unanimous consent that once the Senate receives the conference report, the conference report be considered agreed to and the motion to reconsider be laid upon the table

Conference managers for H.R. 4577 were, for the House: John Edward Porter, C.W. Bill Young, Henry Bonilla, Ernest J. Istook, Jr., Dan Miller, Jay Dickey, Roger F. Wicker, Anne M. Northup, Randy `Duke’ Cunningham, David R. Obey, Steny H. Hoyer, Nancy Pelosi, Nita M. Lowey, Rosa L. DeLauro, and Jesse L. Jackson, Jr. and, for the Senate: Arlen Specter, Thad Cochran, Slade Gorton, Judd Gregg, Kay Bailey Hutchison, Ted Stevens, Pete V. Domenici, Tom Harkin, Ernest F. Hollings, Daniel K. Inouye, Harry Reid, Herb Kohl, Patty Murray, Dianne Feinstein, and Robert C. Byrd

Press Release from the CFTC:

Congress, in passing this law, has effectively implemented the recommendations set forth in the President’s Working Group on Financial Markets’ Report on Over-the-Counter Derivatives Markets and the Commodity Exchange Act

December 21, 2000 – H.R. 4577 was signed by President Clinton and the NYT reported:

At the eleventh hour last Friday night, Congress passed a measure that will benefit Wall Street at the expense of the average investor. This bill should raise a few eyebrows this holiday season, when investment bankers and brokers are cashing hefty bonus checks just as the holdings of many small investors are entering free fall.

The bill, the Commodity Futures Modernization Act of 2000, which passed after an intense push by Wall Street lobbyists, changes the financial markets in two ways. First, it lifts a longstanding ban on futures trading in individual stocks, thus allowing investors to buy shares through brokers with very little money down. Second, it protects a lucrative business for bankers — the private financial contracts known as swaps — from being regulated, for the most part. Investors are affected by swaps because they are used by many mutual funds and publicly traded companies. (In a swap, one party bets that an economic variable — interest rates, for instance — will go up, while the other bets on its going down.)

The first change — trading in single-stock futures — might sound like a cheap way for investors to have fun. Under existing federal rules, you are required to ante up at least half of the purchase price when you buy a stock. For example, if you want to buy $2,000 worth of Yahoo (just to pick on a company that lost about $100 billion in value this year), you could pay just $1,000, with your broker lending you the extra money. Of course, if the stock drops too much, you get a ”margin call” from your broker, demanding repayment. Under the new provisions, you can buy stock futures with very little cash up front. For $1,000, you might buy $10,000 worth of stock futures, or even more.

It’s not surprising that Wall Street lobbied for the new rules. The major banks and investment houses, chock-full of investment bankers, brokers and traders, will earn big commissions and trading profits on single-stock futures contracts. As always, they will make money regardless of whether their customers do.

Crooks, liars, deceivers, manipulators, grafters, irresponsible hawgs at the government trough – a rotten congress then and now! (a few exceptions, Rep Grayson, Sen. Whitehouse, Feingold, Rep Waxman…)