SEC Chair Schapiro: Swaps Not Sufficiently Regulated In Dodd Bill

washingtonpost.com:

While legislation pending in the Senate would bring a host of vital improvements, important gaps in regulation still need to be closed.

One such gap involves a currently unregulated financial instrument called a "swap."

Read the whole story: washingtonpost.com

Comments

[legalgirl]

12:45 PM on 04/04/2010

This reminds of cooking something new for the family for a holiday meal without testing the recipe to see if it really works before you serve it. Anybody ever consider back-testing these ideas before they're inflicted on the rest of us? It's past time for them to eat their own cooking -- try it on YOUR portfolio and let me know how that works out before you offer it to me.

[hellboundtrain]

10:48 PM on 04/05/2010

Absolutely no testing needed, because it is YOUR portfolio!
They don't give a flying fork if it works or not! Deal with your losses!

[JXJASON]

07:02 AM on 04/04/2010

We got screwed in 1999 with the repeal of Glass-Steagall. Most of the bums that did this to us are still around... ( Dodd, Franks, Bill and Hillary Clinton, Phil Gramm, etc., etc. )

Vote them ALL out of office in November.

In the meantime, do not buy derivatives, options, commodity futures or other junk and stop gambling.

I hope that a new Congress will do what Mr. Volker and Mr. Thomas Hoenig ( of the Kansas City Fed ) have suggested.

Also, those "financial products" should be made illegal.

[kclz2420]

11:39 PM on 04/03/2010

LOL - is this the same SEC that had Madoff's Ponzi Scheme shoved under its nose on multiple occasions in the early 2000's? The same SEC that served as Wall Street's handmaiden?

I'm less concerned about the SEC's sudden care about the trade of CD swaps against bad mortgages than I am about its lack of WILL POWER to enforce any laws it supposedly wants to see ratified. Big middle finger to the SEC, thanks for losing $50 billion to a ponzi scheme you idiots could have prevented.

[WIpatriot]

09:35 PM on 04/05/2010

A truly valid opinion.

[nopilikia]

03:20 PM on 04/03/2010

Congress created this disaster when they repealed in (1999/2000) the 1907 Bucket Shop Law that was in place for almost a hundred years. In the short ten years that followed Wall Street flimflammed all levels of Gov. foreign and domestic, mutual funds, pension funds, individuals, and anything with money to BUY....CDSs. When the con unraveled the Wall Street Bankers were stuck with a 650 trillion dollar pile of......well you know. See the problem? If you regulated or make transparent that 650 trillion pile, you will not get 100 cents on the dollar. Because now, everyone can see it's nothing more than a pile of....well you know. As long as Wall Street Bankers can keep CDSs unregulated and in the dark, they can put the stuff in gift boxes and sell it to...............well you know who.

[spinns17]

10:15 AM on 04/03/2010

ok who is in charge him or her?

[hellboundtrain]

07:24 AM on 04/03/2010

No. They really don't WANT to end them!

[nopilikia]

03:28 PM on 04/03/2010

Correct. Wall Street Bankers are the greatest Flim Flam Men in the world.

[jeffp26]

11:00 PM on 04/02/2010

Wow, I did not think it was possible. But Mary Schapiro, who ran the corrupt FINRA for years, and made millions doing so, is even uglier now than she was. I thought it was impossible. My mistake.

[ThomastonPaine]

10:07 PM on 04/02/2010

End Naked Credit Default Swaps--these are wholly negative speculative instruments.

More transparancy, clearinghouses and exchanges for investor protection are essential reforms.

Again,

Naked credit default swaps strongly incentivize negative economic outcomes. Legitimate hedging with swaps is beneficial--but in their naked form they lose any redemptive justification. An American loses a home or a business fails and some unknown entity profits. This is not gambling on the “Giants” to lose-- it is simply gambling on--and rooting for-- the American people to lose. A system that is struggling for recovery should not allow these unconscionable instruments that reward failure…

Positive incentives will produce positive results.

[xlntcat]

05:31 AM on 04/03/2010

Congress shot down doing that a year ago or rather the U S Senate did.

[hellboundtrain]

07:23 AM on 04/03/2010

I don't think that they know how to end them, too many of the elite have money tied up in them.
So, away we go!

[binksmom85]

12:21 AM on 04/04/2010

make any new sales illegal, and via legislation, force them to reconcile all of them over 5 years

[WIpatriot]

09:35 PM on 04/05/2010

See ya next week with a brand new show...

[Winston120]

09:47 PM on 04/02/2010

Mary, save your outrage. We don't trust you. You are a WSBiatch.

[jeffp26]

11:00 PM on 04/02/2010

Bingo.

[ErnestineBass]

10:59 PM on 04/03/2010

May be...but it's still nice to finally hear SOMEONE in that swamp say that these toxic CDS instruments need to be REGULATED.

Dodd sure couldn't.

[WIpatriot]

09:36 PM on 04/05/2010

Couldn't AND wouldn't.

[Kevin Atlanta]

09:29 PM on 04/02/2010

The Dodd Corporate Communist Collusion and Cooperation Bill of 2010 is an open pandering to his Banking Masters. Does anyone think that any real reform, regulation or justice will come from the corrupt purchased politicians on Capital Hill?
http://maplight.org/us-congress/interest
$17 million + from the Banksters is this retiring creature's claim to fame. I'm sure he'll find a sweet spot at Citi or Goldman Sachs to keep him in the style he's become accustomed to while on the Taxpayer dime.

[xlntcat]

05:36 AM on 04/03/2010

To begin with the administration's financial team including Elizabeth Warren and Shelia Bair wrote the bill and walked it to Congress. Most concurred that it was a bill that would prevent ever revisiting this particular crises in the future. Elizabeth Warren was asked that question on CNBC and she concurred. It was met by 4 lobbyist for every congressperson by Barney Frank got it through the house with on a couple troublesome loopholesl. It has benn stalled in the Senate since last year. Shelby promised the bankers right before healthcare reform passed on tape that he would take care of them and Boehner who lacks the power to do anything assured them that he would stall it until 2011.

[vino22]

08:19 PM on 04/02/2010

If they wanted glass stegall reinstated all Obama has to do is make an executive order...problem solved

[nanotubz]

09:34 PM on 04/02/2010

Obama is President not dictator. Congressional action is required. You need to restudy US civics.

[vino22]

11:19 PM on 04/02/2010

Most people would agree with that on here...sarcasim. tyring to get a fan or two

[binksmom85]

12:24 AM on 04/04/2010

we kinda got used to an unreasonable over-reaching (reach-around?) prez before Obama, so we are all a little amnesiac for what our republic is supposed to look like

[dtmfman]

08:19 PM on 04/02/2010

Here's a primer that will explain everything you will ever need to know about the sec mess....

http://www.femuscle.org/CoolStuff/SECMESS.pps

[dtmfman]

08:17 PM on 04/02/2010

did anyone with 1/2 a brain really think dudd's bill would do ANYTHING? dudd is big business dem friend....any "reform" bill will have less teeth than the front row of a willie nelson concert....

Question: What has 17 teeth and 44 legs?
Answer: The front row of a willie nelson concert....

[LogicalMathMan]

07:57 PM on 04/02/2010

I agree...re-instate Glass Steagall which is what the Volcker Rule is. How about the government charges an interest rate of ...oh...say...18% for any stimulus money loaned to banks? This could be a self-regulating mechanism since most banks like to borrow at prime plus 1%

[iridium53]

07:52 PM on 04/02/2010

ROFLMAO
Schapiro is criticising Dodd's bill?

The SEC so rarely enforces the existing laws it is hardly worth the trouble of commenting.
Since when did the SEC do anything but seek small fines that, ultimately, punish the shareholders twice - once as victims of the officers of the company, next as victims of the SEC.

So rarely does the SEC actually seek criminal charges against the executives they are a cruel joke.

There's no question that Dodd's bill is everything Obama and Emanuel want - totally watered down so that it doesn't disturb the status quo but gives the appearance of progress. But, that's the Obama / Emanuel approach to everything - the two yard gain and a big celebration, saying they'll fix it later. Tra, la,la....

[Winston120]

09:46 PM on 04/02/2010

Amen.

[binksmom85]

12:25 AM on 04/04/2010

she is just covering her you know what