Courtesy of Pam Martens.
Senator Charles (Chuck) Schumer of New York is writing letters and pounding the table to try to stop sweeping new regulation of derivatives from being put into effect by the Commodity Futures Trading Commission (CFTC) four days from now on July 12.
Schumer is leading an assault against Gary Gensler, Chair of the CFTC, who wants to impose cross-border rules which would prevent firms like JPMorgan Chase from simply moving its derivative trades to London or another foreign trading venue to escape U.S. rules – the situation that allowed JPMorgan to lose $6.2 billion of deposits in its infamous London Whale derivatives episode.
Schumer’s actions and those of other Senate Democrats who joined with him in a letter to Jack Lew, Treasury Secretary, brought a sharp rebuke last week from the editorial board of the New York Times:
“In the letter to Mr. Lew, the senators say that to avoid confusing the banks, the C.F.T.C. cross-border guidelines should not take effect until the Securities and Exchange Commission completes a separate set of derivatives rules. That is ridiculous. The C.F.T.C. oversees virtually all of the multitrillion-dollar derivatives market; the S.E.C. a relative sliver. The C.F.T.C. has diligently issued its required rules under the Dodd-Frank law over the past three years and has set a deadline of July 12 to put the cross-border guidelines into effect. The S.E.C. first got around to issuing a pathetically weak derivatives proposal in May.”
It’s not often we see the words “ridiculous” and “pathetically weak” in editorials about Wall Street in the New York Times. The New York Times editorial board sounds particularly steamed in this instance. Perhaps they, like us, have had about all they can stomach of Chuck Schumer as Wall Street’s enabler.
On November 1, 2006, the Wall Street Journal published an opinion piece by Schumer and Mayor Michael Bloomberg titled, “To Save New York, Learn from London.” Keep in mind that this opinion piece came exactly one year before Wall Street would begin its apocalyptic meltdown from lax regulation, secret off balance sheet holdings, rigged accounting, and too cozy a relationship with Washington.
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