We can't afford to let the powers that be slide on this.
President Obama says he has a heart for the people, well he should do battle for the American people on passing very strong derivatives trading measures.
I know it's a issue politically and logistically, but something must be done.
Here's what I was thinking:
1. We can limit the amount of trading on certain products which would in effect induce a trade ceiling.
2. We can limit what can be on the futures market, or the currency that denominates it, like the US dollar (Petro-dollar) should be replaced with a basket currency, - 20% mark up.
3. We can limit the amount of avenues trades have. We can implement a "freedom of information" act on derivatives and futures, such as CDS trades, to the consumer. Force financiers to state where they got this instrument from and, allow the regulators to put up an advisory if the debt has been collateralised or traded to third party participants.
4. Force firms to show, in detail, their overseas swaps.
This is a start. But, something must be done as well as beefing up the regulatory bodies that supervise them.
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4 comments:
Youri,
In my opinion we face a somewhat similar dilemma with regard to futures speculation in energy. Overseas exchanges are not currently transparent. What is happening in the oil market at present does not appear to have a base in reality, especially with regard to demand.
I do not doubt that in time consuption must slow in order to ensure prosperity in the future and I understand the importance of speculators in the marketplace. However, because the markets are not transparent we are left to guess at who is really behind bidding prices up.
As I tend to read a lot into things and consider myself to be somewhat cynical I am apt to believe that it is possible that energy prices have been intentionally pushed up so that Washington can promote a "green" adgenda with ease. In the meanwhile OPEC's wishes have been cited in the mainstream media.
I could be completely wrong but, until transparency in markets is achieved only those directly involved in the trading will know for sure. To this date I am not aware of any major proven culprits having been brought to light who are large enough to have been responsible for the action over the past two years.
The idea of a trade ceiling seems appealing at first but can almost certainly be worked around through the use of shells where a group of smaller bodies do the work of a larger entity.
Unless regulators are both determined to work hard with integrity, good intentions for all and are brighter than those who may choose to circumvent any propoesed laws we could easily end up back at square one again in no time at all.
Best wishes,
X
p.s. Thank you for voting in my $USD poll. I will release the results after July 4th.
Hi HOE,
Pretty strong conspiracy theory. I normally don't indulge conspiracy theories unless I have proof. But, in this case, it was pure greed--forget the green agenda for a second, I reckon.
It was greed that kept the prices up and its green that did the financial markets.
Thank you for the comment and keep coming.
Youri
Youri,
It is always good to get a second opinion, even if one has to endure being called out as a blog sl*t. I appreciate your perspective and you are correct, I have NO proof. My hope is that increased transparency in markets will change this in due time with regard to future happenings. Until then I'll be up late pondering and modeling my tinfoil hat.
Thanks again,
X
Hi HOE,
Don't get me wrong. I enjoy my conspiracy theory just as much as the other guy, but this time the green agenda didn't cause this--although they are taking advantage of it.
Make enough tin foil and make sure it's not saran wrap or plastic--not bio-degradable. The green guys in my ceiling won't like it any other way!
LOL...
BeSt,
Youri
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