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WALL STREET TRANSPARENCY AND ACCOUNTABILITY ACT OF 2010

Oops, with all the fried squid balls flying around, this important piece of news almost slipped through the cracks.

 

FOR IMMEDIATE RELEASE--

Washington – U.S. Senator Blanche Lincoln, D-Ark., Chairman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry today introduced the “The Wall Street Transparency and Accountability Act” to bring 100 percent transparency to the nation’s financial markets, prevent future bailouts and protect jobs on Main Street.

“The days of backroom Wall Street deals are over,” Lincoln said. “This is the strongest Wall Street reform bill to date and represents an historic opportunity for real reform. America’s consumers and businesses will finally see a financial market that operates in an open and transparent manner.”

Lincoln’s legislation includes mandatory clearing and trading requirements, real-time reporting of derivatives trades and ensures that all loopholes are closed.

“The clearing and trading of financial transactions lowers risks and makes the entire financial system safer. My bill will bring 100 percent transparency to an unregulated $600 trillion market, expose these markets to the light of day and keep this money back on Main Street where it belongs,” Lincoln said.

Lincoln’s proposal also prohibits the Federal Reserve and FDIC from providing any federal funds to bail out Wall Street firms who engage in risky derivative deals. Banks engaging in risky swaps transactions will be forced to spin off their swap dealer desks or be barred from receiving any federal assistance.

“My proposal puts an end to ‘too big to fail’ and prevents future Wall Street bailouts. Financial institutions will have to decide if they want to be banks or if they want to engage in the risky financial trading that caused the collapse of firms such as AIG,” Lincoln said. “My bill also requires Wall Street to put the interests of Main Street, such as municipalities and retiree pension funds, above their own bottom line and puts an end to Wall Street’s ability to knowingly enter into deals that allow their clients to defraud third parties or the public.”

As Chairman of the U.S. Senate Agriculture Committee, Lincoln has jurisdiction of the Commodity Futures Trading Commission which oversees the derivatives market. Since becoming Chairman last fall, Lincoln has worked closely with Senate Democrats and Republicans, as well as the Administration to craft meaningful reform.

A summary of The Wall Street Transparency and Accountability Act and full text is below.

The Wall Street Transparency and Accountability Act of 2010

Senate Committee on Agriculture, Nutrition, and Forestry, Chairman Blanche Lincoln

This is landmark reform legislation that will bring 100 percent transparency to an unregulated $600 trillion market, close all loopholes and keep jobs on Main Street. This will protect taxpayers, jobs, consumers and the global economy, and will go further than any other proposal to prevent future bailouts.

Historic Reform of the Derivatives Market

Brings 100 Percent Transparency to Market with Real-Time Price Reporting:
Wall Street will no longer be able to make excessive profits by operating in the dark. Exposing these markets to the light of day will put this money where it belongs – on Main Street. The public will see what is being traded, who is doing the trading and, most importantly, regulators can go after fraud, manipulation and excessive speculation.

Lowers Systemic Risk by Requiring Mandatory Trading and Clearing:
Trading and clearing of swaps lower risks and make the entire financial system safer. Transactions, determined by the regulator, will be required to clear through a clearinghouse. In addition, these transactions must be traded on a regulated exchange, which will provide further market transparency.

Prevents Future Bailouts and Addresses “Too Big to Fail”:
Banks need to be kept in the business of banking. The taxpayer funds used to bail out AIG and other Wall Street firms will never be used for this purpose again. The Federal Reserve and FDIC will be prohibited from providing any federal funds to bail out Wall Street firms who engage in risky derivative deals.

Closes Loopholes:
Loopholes have allowed far too many to avoid the law of the land or set up shell companies to claim exemptions. This bill gives regulators the authority to close any loophole they find, protecting the markets, taxpayers and the economy.

Protects Jobs on Main Street:
The interests of Main Street will be protected. Commercial businesses and manufacturers who use these markets and customized contracts to manage risk will still be permitted to do so without imposing additional margin costs. This will protect American jobs and keep consumer costs low.

Protects Municipalities and Pensions:
Swaps dealers will have a “fiduciary duty,” just like investment advisers, that will require the interests of municipalities and pension retirement funds be put first; ensuring Wall Street doesn’t take advantage of Main Street and taxpayers.

Regulates Foreign Exchange Transactions:
Foreign exchange swaps will be regulated like all other Wall Street contracts. At $60 trillion, this is the second largest component of the swaps market and must be regulated.

Increases Enforcement Authority to Punish Bad Behavior:
Regulators will be given broad enforcement authority to punish bad actors that knowingly help clients defraud third parties or the public such as when Wall Street helped Greece use swaps to hide the true state of the country’s finances.

Wall Street Transparency and Accountability Act of 2010

EURO PIT

REUTERS--The euro fell broadly on Thursday as the cost of insuring against a Greek default rose, underscoring persistent concerns about Greece's ability to service its debt.

STATUS REPORT: GREECE

WSJ--Greece saw strong demand for its latest debt auction but was forced to pay a hefty interest rate while yields on longer-term bonds jumped again, a sign that investors remain wary about Athens' solvency.

ALIENS WALK AMONG US

BANZAI7 NEWS--A new Reuters News poll conducted by Ipsos indicates that one in five (20%) of presumably human adults surveyed in 22 countries (representing 75% of the worlds GDP) say they believe that alien beings have come down to earth and walk amongst us in our communities disguised as "us". In the United States this represents a higher percentage than the number of human adults who believe the leverage and net asset figures reported by the nation's largest banks.

The following  is a list of the 10 countries where citizens are most likely to agree that "alien beings have come to earth and walk amongst us in our communities disguised as us." You will notice that Iran and North Korea do not appear on this list. Neither does Greece.

India - 45% agree/55% disagree (BRIC)
China - 42% agree/50% disagree (BRIC)
Japan - 29% agree/71% disagree (Godzilla Country)
South Korea - 27% agree/73% disagree (Kimchee Country)
Italy - 25% agree/75% disagree (PIGS)
United States - 24% agree/76% disagree (REPO 105)
Brazil - 24% agree/76% disagree (BRIC)
Australia - 23% agree/77% disagree (Crazy Aussies)
Russia - 21% agree/79% disagree (BRIC)
Spain - 21% agree/79% disagree (PIGS)

GREECE--OH SHIT!

VATI-CONEHEADS

REUTERS--The Vaticone is ratcheting up its counterattack against accusations that Pope Benedict XVI helped cover up the actions of pedophile priests to save the church's reputation.

Senior cardinals from Remulac are decrying what they depict as an anti-Conolic `'hate" campaign that they say is related to the fact that Benedict is leading church opposition to cross-species marriage.

WB7: The Vaticone must be using the same PR firm as Greece. Is anyone selling Vaticone credibility default swaps?

GREEK BAILOUT IN PROGRESS

WSJ--European stocks weakened following a four-day Easter break as traders reacted to reports that Greece wants to exclude participation by the International Monetary Fund in the financial-aid package put together by the European Union last month so that it isn't forced to adopt the onerous austerity measures that are likely to accompany any IMF funding.

EURO UNDERTOW WARNING

CAUTION GREECE

MERKEL AND THE BLACK SWAN

BANZAI7 NEWS--Greek Prime Minister George Papandreou is due Friday in Berlin, where he is expected to attempt to seduce financial aid that Chancellor Angela Merkel currently is unwilling to provide.

The Greek government is looking for aid from its richer euro-zone neighbors now that it has laid out tough new austerity measures. But senior German and French officials Friday continued to promise only moral support.

"We should stand helpfully by Greece's side, and not encourage complications," Merkel said Friday at a business conference in Munich. She said that she and Papandreou will discuss "strengthened cooperation" between Germany and Greece. "It will be an interesting conversation, but a friendly one, too," Merkel said.

UNIONS ACT TO SUPPORT GREEK H1N1 BOND OFFERING

BANZAI7 NEWS--Greece's main private and public sector labour unions called a 3-hour work stoppage for Friday, as a show of strong support for new austerity measures designed to stem a debt crisis that has shaken the euro zone.

About 70 communist trade unionists occupied the finance ministry on Thursday, preventing workers from entering the building, police said, in the latest action in support of pay cuts and a pensions freeze ordered by the Socialist government.

The two main unions, which represent 2.5 million workers or half of Greece's workforce, say extra public sector wage cuts and tax hikes announced on Wednesday to tackle a 300 billion euro ($410 billion) debt mountain are a good reason why all working class Greeks should invest in the much-awaited H1N1 (PIIG) bond issue intended to raise €3 billion and €5 billion ($4.11 billion to $6.85 billion.

SELLING ENGLAND BY THE POUND

NYT--As Greece’s debt troubles batter the euro, Britain has done its utmost to stay above the fray.

Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets. Good luck.

The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape.

WB7--So what does this make the US dollar?  The currency dumpster that everyone runs to when there's no where else to hide. Is it starting to feel like Spring 2008 yet?

CREDIT DEFAULT SCHNAPPS

BANZAI7 NEWS--Reports that Germany will back a financial bailout have bolstered European financial markets, but Berlin's hesitant leaders are running up against stiffening popular opposition in Germany.

New German opinion polls and conversations with Berlin lawmakers and pundits reveal a deep disinclination to throw German money into a rescue plan for Greece, helping to explain the lack of progress or details emerging from reported contingency plans.

Chancellor Angela Merkel remains focused on emphasizing that radical Greek budget reforms are the key to solving its debt crisis. She has made no reference to any plan for Germany to purchase or guarantee Greek government debt. Instead, she regularly brings up the no-bailout clause in the Maastricht Treaty for the European Monetary Union.

A group of German politicians have proposed a different way to deal with Greece's financial woes and the plight of the EURO: Credit Default Schnapps.

MORAL HAZARD KNOWS NO BOUNDS

AP--Germany's chancellor says she is opposed to EU countries bailing out fellow eurozone member Greece.

"We have a contract which rules out the possibility of bailing out other nations," Merkel told German broadcaster ARD in an interview Sunday night.

However, she did not explicitly rule out state-owned banks buying bonds issued by Greece, a rescue solution some media report is in the works.

WB7--And who bails the state banks madam chancellor?

INGLORIOUS BANKSTERS 2009

You probably heard we in the investment bankin' business; we in the Euro shortin' business. And cousin, Business is a-boomin'. 

BANZAI7 NEWS--A plan led by Germany to bail out Greece with aid of as much as €30 billion has begun to take shape, Greek and banking officials say, but the timing and terms of any rescue remained unclear.

Greek officials hope to steal a deal by Friday, when Greek Prime Minister George Papandreou meets in Berlin with German Chancellor Angela Merkel, but a senior German official insisted that the bailout papers are not in order.  "Who and what is Private Butz Blankfein?"

GOLDMAN AND MEDUSA

 

BANZAI7 NEWS--Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank is reviewing derivatives contracts arranged between Goldman Sachs Group Inc. and investment banks with Greece.

A NITEMARE IN GREECE

CDMs ANYONE?

BANZAI7--Federal Reserve Chairman Ben Bernanke says the central bank is looking into Goldman Sachs and other Wall Street firms' use of a sophisticated investment instrument to make bets that Greece will default on its debt, the "credit default mop."

Bernanke says the Fed is looking into companies' use of credit default mops, a form of insurance bet on bond defaults. Bernanke made the comments at the start of a Senate Banking Committee hearing on moping up the economy.

The panel's chairman, Sen. Christopher Dodge, Douche-Conn., says he is troubled that this practice could worsen Greece's debt crisis. He further noted that the mop could soon land in Washington DC.

THE MIRACLES OF FINANCIAL INNOVATION

 

It's a miracle!

NYT--Derivative bets by some of the same banks that helped Greece shroud its mounting debts with derivatives may actually now be pushing the nation closer to the brink of derivative generated financial ruin.

Echoing the kind of miracle derivative trades that toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to scientists, traders, money managers and swimming suit models.