Gottes Mühlen mahlen langsam, mahlen aber trefflich klein
Ob aus Langmut er sich säumet, bringt mit Schärf’ er alles ein*.
Friedrich von Logau
This story about the Wall Street lobby was interesting, particularly since this morning Bill Dudley, friend of Wall Street and Chairman of the NY Fed, called for the continuing purchase of 1.4 trillion in bad mortgage debt from these banks at above market prices here.
And here the National Association of Banking Economists has overwhelmingly recommended that there be no new stimulus packages aimed at the public and consumers, who have had enough. In fact, the government should begin to cut spending on public programs.
But not a word about the subsidy to these money addicts, the banks, who use the opaque derivatives markets to widen the spreads on products, to hoodwink the naive and less sophisticated individuals and small towns.
And so Wall Street once again gathers its forces to persuade (provide many millions in donations and soft bribes) to Congress and the Administration. It is said that many Congressmen were able to retire comfortably, or send their children to the top private universities, thanks to the lobbying efforts that accompanied the repeal of Glass-Steagall.
Do you get the picture yet?
Bloomberg
Wall Street Stealth Lobby Defends $35 Billion Derivatives Haul
By Christine Harper, Matthew Leising and Shannon Harrington
Aug. 31 (Bloomberg) — Wall Street is suiting up for a battle to protect one of its richest fiefdoms, the $592 trillion over-the-counter derivatives market that is facing the biggest overhaul since its creation 30 years ago.
Five U.S. commercial banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp., are on track to earn more than $35 billion this year trading unregulated derivatives contracts. At stake is how much of that business they and other dealers will be able to keep.
“Business models of the larger dealers have such a paucity of opportunities for profit that they have to defend the last great frontier for double-digit, even triple-digit returns,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics, which analyzes banks for investors.
The Washington fight, conducted mostly behind closed doors, has been overshadowed
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
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