Tuesday, April 20, 2010

How About An Honest Campaign Ad For A Change?


I'd like to think Kevin Black was running for the U.S. Senate as a Republican-- and, looking at the video below, it would be hard to deny that he'd fit in well there-- although the hookers are all women so... its just possible that perhaps he's not a Republican. Can someone so obviously in the bag for Wall Street be a Democrat? Sure-- crooks like Blanche Lincoln, to pick one random conservative-in-Democratic-clothing, have gobbled up as much in thinly veiled bribes from Wall Street as your garden variety Republican. A conservative, after all, is a conservative, no matter if the jersey is red or blue. And conservative ideology is all wrapped up in the "greed is good" ethos and the whole lot of them have twisted whatever legitimate conservatism there ever was into an excuse for a sick Protestant Ethic kind of self enrichment. (The chart on the left, by the way, represents how much the 20 top senatorial recipients have accepted from the financial sector so far this cycle.)

So, while real progressives like Jeff Merkley (D-OR) take to the floor to demand that especially crooked conservatives like John Cornyn (R-TX) and Miss McConnell (R-KY), reveal what backroom deals they made with Wall Street execs at their meeting with hedge fund execs, and while delusional Master of the Universe Jamie Dimon whines that the problem with America is that banksters don't have enough political power, lobbyists are swarming Capitol Hill, checkbooks in hand, fighting against Wall Street re-regulation.
A main weapon being wielded to fight the battle, of course, is money. Agriculture Committee members have received $22.8 million in this election cycle from people and organizations affiliated with financial, insurance and real estate companies — two and a half times what they received from agricultural donors, according to the Center for Responsive Politics.

Much of that lobbying has centered on Senator Blanche Lincoln, the Arkansas Democrat who is the committee’s chairwoman and who last week introduced the bill that would prevent banks from trading derivatives directly.

The daughter of a sixth-generation rice farmer, she has found herself navigating a dangerous channel between Wall Street firms, which raised $60,000 at two fund-raisers for her re-election campaign so far this year, and her constituents, many of whom want a crackdown on the speculation that led to the financial crisis.

Other committee members, on both sides of the aisle, also have reaped donations from people and companies in the derivatives business, including Senator Saxby Chambliss of Georgia, who is the committee’s ranking Republican member; Kent Conrad, the North Dakota Democrat; and Charles E. Grassley, the Iowa Republican.

The committee will be the main arena for the derivatives fight for reasons dating to an era when farming was more important to the nation’s economy than finance. In their simplest form, derivatives can provide financial protection on the value of an investment or commodity. For example, by putting up a relatively small amount of money, a farmer could buy a derivative known as a forward or futures contract that would guarantee a set price for crops and thereby guard against ruinous price swings between planting and harvest.

But the most esoteric derivatives-- which also are the most profitable for banks to create and trade-- have little economic purpose other than to let investors place financial bets, critics say.

A more complex type of derivative helped to inflate the housing bubble in recent years, as Wall Street repackaged high-risk mortgages into securities that speculators could use to bet on the direction of the housing market. Financial institutions earned millions of dollars in fees for creating the securities. But many of the derivatives became worthless when foreclosures skyrocketed, leading to billions of dollars of losses-- and taxpayer bailouts-- at the banks and insurance companies that owned them.

Now, these obscure and largely unregulated securities-- more than $600 trillion of which are tucked into investors’ portfolios, according to the Treasury Department-- are at the center of the fight over financial reform led by the Obama administration.

“The best that we can do for the American people is to put in place rules that will prevent firms from taking this risk again, make sure we protect the taxpayer, bring derivatives out of the dark-- that’s what we can do, ” said Timothy F. Geithner, the Treasury secretary.

Now if all these senators campaign ads were as straight forward as Kevin Black's, at least voters could make a rational choice-- although there isn't often much of a choice to make, since very few senators have hands as clean as Bernie Sanders' or Herb Kohl's, two senators who refuse to take any bribes from banksters.

Labels: , , ,


At 11:17 AM, Anonymous Anonymous said...

A farmer sells a futures contract to guarantee the price he wants.

Derivatives are OPTIONS.

Put options are to sell at a certain price at a certain time.

Call options are to buy at a certain price at a certain time.

In an option deal you pay for the Call/Put price and the Time.

Please get the facts straight on what a derivative is. That is the whole problem with discussions about derivatives is that so few people know what they are.


Post a Comment

<< Home