NYT helps spread more disinformation re Commodities Futures Modernization Act (CFMA) 2000 -

[JohnWxy]

In a Novemmber 16, 2008 article the Times says that: "the Commodity Futures Modernization Act was passed as part of a larger bill by unanimous consent after Mr. Gramm dominated the Senate debate."

Actually, there was no debate of this bill on the Senate floor the "part of a larger bill" the article refers to was the Omnibus Spending Bill 2000 (a 11,000 page document to fund the Government passed in the waning hours on the last day of that session of Congress.) to which the CFMA WAS ADDED AS A RIDER. -- actually, virtually no Senators even knew the CFMA was in there!. To say Gramm dominated any debate is F---ing lie as there was no debate.

this is why people are leaving the corporate M$M for the internet. To get away from dis-information and find out what is really going on.

Finally, he had extracted enough. In December 2000, the Commodity Futures Modernization Act was passed as part of a larger bill by unanimous consent after Mr. Gramm dominated the Senate debate.

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But some critics worried that the lack of oversight would allow abuses that could threaten the economy.

Frank Partnoy, a law professor at the University of San Diego and an expert on derivatives, said, “No one, including regulators, could get an accurate picture of this market. The consequences of that is that it left us in the dark for the last eight years.” And, he added, “Bad things happen when it’s dark.”

http://www.nytimes.com/2008/11/17/business/economy/17gramm.html?pagewanted=3


The Commodities Futures Modernization act is what MADE TRADING IN CREDIT DEFAULT SWAPS LEGAL. It enabled the UNREGULATED, UNMONITORED TRADING in CDSs and this is what lead to the DEREGULATION DISASTER we are now witnessing which is bringing down economies around the world.

Just as was demonstrated in 1929 unregulated investment activity quickly leads to unregulated speculation (in this case by banks buying MOrtgage Backed Securities which they held inadequate reserves for because they thought the Credit Default Swaps they bought (from Insurers such as AIG, who kept inadequate reserves for the CDSs they sold.) would protect them from loss.). This is what (along with the real estate bubble helped along with too easy credit by the Fed) brought about the economic meltdown the world is now descending into.

[Idealism]

1. As someone in this industry, I can tell you the claims you make are 100% true

It was an omnibus spending bill without debate, a "rider" bill that usually would be pork, but not in this case.

Phil Gramm caused much of this pain, coupled with Greenspan's refusal to regulate derivatives after much lobbying from bankers.

[JohnWxy]

2. This is the truth behind our Credit Catastrophe. It is actually the Deregulation Disaster courtesy

of Phil Gramm the most fanatical proponent of deregulation in the Republican party that brought about the 'credit meltdown'. This is the true story that M$M will not tell people. They talk all around it, about the greedy bankers, and the rest of the cast of characters (and Greeenspan was a major character in this Deregulation Disaster) but they remain mum on the CFMA which made trading in CDSs legal. This also enables them to avoid telling people that it is this same legislation that made trading in energy futures over electronic media legal and unregulated which lead directly to the ENRON Debacle)(well, 60 minutes did report on this but that is the only case I know of MSM actually mentioning deregulation as the cause of the dire economic situation we are now in.)

I think Obama too should have hit harder on this in the campaign. Drive home the message that human greed is nothing new. It's been around ever since we stood upright and could grasp with both hands what we wanted. That is precisely why we need regulations. What was different was the Republicans kept pushing for lax oversight by regulating agencies and then they sneeked through the Commodities Futures Modernization Act and then things took their inevitable course. People took risks they shouldn't have - banks bought CDSs and kept inadequate reserves for the securitized debt they had on their books and eventually the credit meltdown was the inevitable result. It only took about 7 years to put the whole economy in the kind of jeopardy is was in back in the 1930's. Such are the wonders of Deregulation.

Thank you REpublican Corporate representatives and Phil Gramm in particular (the guy who said "America is suffering from a mental depression.", and: "America has become a nation of complainers.". Phil Gramm, the "W" and Karl Rove - a real Train of Fools - an idiot, an illigitimate president and a pathological ideologue have done more damage to this country than any other screw-ups I can think of.

The best article I have seen on the Deregulation Disaster is in Mother Jones: Foreclosure Phil.

Thank you for your comment. People really need to know how this actually came to happen (not so much people on DU but out in the community of sleep-walkers - few people even know about the CFMA - thanks in no small part to the M$M.

Good job NBC, ABC, CBS and PBS. The Republican Party appreciates your efforts at keeping the populace disinformed.