UNDER THE COUNTER DERIVATIVES ACT

BANZAI7 NEWS--Last week the House Financial Services Committee passed the Over the Counter Derivatives Market Act of 2009. Michael Greenberger, a University of Maryland law professor and an expert in derivatives, criticized the House bill. “While I know there was a good-faith effort to improve the regulation, the plain language of the legislation can only be read as a Christmas tree of decorative gifts to the banking industry,” he said. “And this is being done when people acknowledge the unregulated O.T.C. derivatives market was a principal reason for the meltdown.”

Here is the Bill:
Over-the-Counter Derivatives Markets Act of 2009
Unless you want to do serious damage to your frontal cortex, don't try to read it.

This political football is on its way to the House Agricultural Committee where committee scientists will attempt to ascertain if it can be used as a biofuel substitute instead of pig feed.

For some reason the Banking Lobby still hates it. They want to keep as much as possible unstandardised and off exchange. Why? To maximize their "edge" of course. In this case "edge" means ability to charge exorbitant fees and ability to trade in an opaque OTC haze. Here's how they are stirring a panic. By telling derivative purchasers like airlines, refineries, manufacturers with foreign currency and interest rate exposure and, oh yes, AIG, that the new rules would require them to put up collateral (so called "margin")to cover their counterparty liability. Something that Hank Paulsen and Ben Bernanke forced Uncle Sam to do on behalf of AIG last year.

Need we say more?