Reader comments
Geithner says derivatives blindsided the government

No one should have been blind-sided by the derivitives problem. It was raised over 15 years ago but Washington and Wall Street did not heed the dangers and warnings, even with a GAO report. Wall Street has had too much power over policy and regulation for too long, and now we are reaping the reward.

Few comments on this, but lots on Jazz news, celebrity matters, and Obama hating. What a country! And we wonder why things are so messed up.

A credit swap is an insurance policy a mortgage holder takes out on a risky loan like the ones required to meet quotas for CRA established during the Clinton years.

No one was blind-sided. Geithner, Rubin and Greenspan prevented the SEC from oversight and were instrumental in the development of credit swaps for the express purpose of shielding lenders from the insane risks of subprime loans they knew could not be repaid.

They bought votes for their party among the gullible, but that was not the primary purpose. They knew that at some point so much debt and risk would be spread through the finance and insurance industries that the house of cards would fall. And when it did, they would be there to save the economy by taking over banking, insurance, medical, energy, automotive, pay scales, local government and anyone else stupid enough to take bail out money and the strings attached.

Get as many people and organizations dependant on government as possible, take over all three branches and the Fed. Then generate enough public fear to jam whatever you want through Congress without giving them time to read it.

This wasn't just Geithner, Rubin and Greenspan. Officials in every Administration in the past 15 years failed, as did BOTH parties in Congress. There were a few who tried (Jim Leach, for example), but the opposition was too great to make much headway. It is essential to limit the influence of lobbyists and business in Washington. I've seen this problem first hand.

Thank the republican senator from Texas, Phil Gramm, for sneaking the Commodities Futures Modernization Act in in the final hours before Christmas recess. This created unregulated derivatives and the "Enron loophole."

What?

Rush never talks about this and you neverheard about it on Fox News.

Drudge dis report Michell's purse cost $6000.

Why bring Canadian Power Rock trio Rush into the discussion? What they gotta do with it? I blame U2.

Blindsided best describes this administration. When the article quotes Barney Frank and Timothy "Weasle" Geithner, its best to pretend your reading the "comics".

"Yes we can" make it after 3 1/2 years of bunch of far left liberals messing this country up.

Nice comments Spoc, but you give them too much credit. They were just out to make money. In an unstable economy these hedge fund and OTC derivatives are the only sure thing on Wall St, duh bucket shop swindles always are. These new regulations Geithner is talking about now is actually streamlining these credit swaps into clearing (while of course offering a loophole for hidden contracts) in order to keep the wealthy happy and keep the Wall St lobbysists' cash flow coming into the Democratic party. We will never get out of this mess until these credit derivatives are once again made illegal as they were before the cfma of 2000. They should only be granted for extreme risk commodities such as in agriculture. Everyone should write their us rep and demand they are made illegal now.