The corruption is so entrenched there has been no quid pro quo reregulations in exchange for the bailout of the insolvent finance system.
Until we are forced to make demands and 'man the barricades' ; nothing will happen structurally and all we will be doing is prolonging a very sick capitalistic system.
Whether the dems will change patterns when they have control of both congressional houses and the presidency will have to be seen once they win it. I tend to doubt it as too many of them come from pretty conservative "country right or wrong, dressed in the flag, we saved the Philippines and never had an empire" backgrounds.
Meanwhile, even conservative hedge-fund pushers like John Mauldin is calling for regulation of markets. I'll quote one part of this week's letter, but he made an earlier comment about regulator not enforcing rules.
He also points out that the numbers were being given are wrong, that employment is worse, housing starts are lower. And, something no one here has mentioned yet, that US imports are down, and exports are up. I suppose one would suspect this as the dollar drifts into 3rd world status.
The World Will Not End And while we are on regulators, it is time for Bernanke and Paulson and SEC chairman Cox to force the credit default swap (CDS) market to move to a regulated exchange. If there is a major risk to my happy news scenario at the beginning of this e-letter, it is the credit default swap market collapsing. That is why Bear Stearns had to be rescued, and why other firms like them are too big to fail. If the CDS markets were on an exchange like any futures contract, Bear could have been allowed to fail. It would have been a sad day, but the Fed would not have had to risk $30 billion. Greenspan was wrong when he said these derivatives did not need to be regulated. They are good for the markets, and I think they are necessary. But let's put them on an exchange where there is clear transparency and the entire economy of Western Civilization is not put at risk by some cowboys who decide to leverage up.
If the CDS markets were on an exchange like any futures contract, Bear could have been allowed to fail. It would have been a sad day, but the Fed would not have had to risk $30 billion. Greenspan was wrong when he said these derivatives did not need to be regulated. They are good for the markets, and I think they are necessary. But let's put them on an exchange where there is clear transparency and the entire economy of Western Civilization is not put at risk by some cowboys who decide to leverage up.
Frank Delaney ~ Ireland
