Taxpayers Now Stand Behind Derivatives Clearinghouses
“Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading — not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net.
“As we noted in May 2010, the authority for this regulatory achievement was inserted into Congress’s pending financial reform bill by then-Senator Chris Dodd. Two months later, the legislation was re-named Dodd-Frank and signed into law by Mr. Obama. One part of the law forces much of the derivatives market into clearinghouses that stand behind every trade. Mr. Dodd’s pet provision creates a mechanism for bailing out these clearinghouses when they run into trouble.”
These are the instruments by which the 1% manipulate the commodities that people need to survive. Food, oil, and alternatives to federal reserve notes. A new aristocracy is being born. They are simply too rich and beautiful to fail. It would be so inconvenient.