WASHINGTON — Sen. Maria Cantwell wants to use state gambling laws to regulate parts of Wall Street, saying someone needs to police financial markets where "casino capitalism" involving highly speculative trades she likens to sophisticated betting continue unabated and threaten to create yet another financial crisis...
Cantwell wants to repeal parts of a 2000 law that barred states from using their gambling laws to help rein in the nearly $600 trillion derivatives market.
The senator's effort comes as Congress is starting to consider tightening federal regulation of financial markets in the wake of the current economic downturn. Cantwell said she's not convinced Congress will take strong enough action and, as a backup, wants to give state attorneys general the power to act.
"They are the last line of defense," Cantwell said. "I don't want them neutered."
Derivatives essentially began as a form of insurance, offering a hedge for such companies as airlines that wanted to lock in the cost of jet fuel to avoid sharp increases. Over the years, however, derivatives became more exotic, allowing investors to place what were essentially side bets on such things as whether people would default on their mortgages or whether the price of oil or natural gas would go up or down...
Yes, that's $600 trillion, people. S600,000,000,000,000.00. It's the root of our recession/ depression/ repression. Regulating the Masters of the Universe would end their mastery, which is why Senator Cantwell would do well to avoid small airplanes if she can not be bought.
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