Politics & Society
Listen Fresh Air Explains who is responsible for the financial meltdown.
Antonia Juhasz: 'Tyranny of Oil' Is A Grave Threat

A fellow at Oil Change International and at the Institute for Policy Studies, she argues that the oil industry's grip on policy and government has never been stronger. She documents her concerns — and argues for remedies — in a new book.
Oil Change International - Institute for Policy Studies.

The Commodities Future Modernazation Act which allowed Toxic Assets aka "Credit Default Swaps", BIG OIL and BANKS and ENTIRE EXCHANGES to be removed from Government Perview.

NIMEX is where crude oil is regulated. This is where they STEAL

Global Commodity, Currency and Equity Index Markets (NYSE: ICE) operates global commodity and financial products marketplaces, including the world’s leading electronic energy markets and soft commodity exchange. ICE’s diverse futures and over-the-counter (OTC) markets offer access to contracts based on crude oil and refined products, natural gas, power and emissions, as well as agricultural commodities including cocoa, coffee, cotton, ethanol, orange juice, wood pulp and sugar, in addition to foreign currency and equity index futures and options.

Deregulation  = Enron set up the Online Exchange shifted its own electricity trades to ruin California and itself.
Phil Gramm set it up, and it is the work of Republicans but the Democrates didn't fight hard enough to stop it over the last 8 years.

MUST READ: Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the center of the housing credit crisis, he pulled a sly maneuver in the Senate that helped create today's subprime meltdown.

Because of the swap-related provisions of Gramm's bill—which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers—a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed.

FOLLOW THE OIL MONEY

PRESIDENTIAL RACE FUELED BY OIL MONEY - SHOWS ALL RELATIONSHIPS


They were allowed to trade futures out of the sight of government regulation. PHIL GRAHAM slipped this The Commodities Future Modernazation Act aka "Enron loophole"

Gramm and Enron
The battle over the “Enron loophole” also could draw attention to McCain’s dependence on Gramm as his chief economic adviser and Gramm’s key role in passing legislation that let Enron trade commodities on electronic platforms without federal oversight. In 2000, with the Republicans in charge of Congress and Gramm chairing the Senate Banking Committee, the exemption on electronic trading was approved without a Senate hearing. Internal Enron documents, which were released in 2002, revealed that the Houston-based company helped write the legislation, which was signed into law by President Bill Clinton in December 2000. Freed from regulatory interference, Enron then used manipulative trading practices to game the California electricity market and drive up electricity prices across the state.

While California consumers were getting fleeced, the new Bush administration shielded Enron from early accusations of market manipulation. President Bush personally joined the fight against imposing caps on the soaring price of electricity, buying additional time for Enron although the company’s house of cards collapsed anyway in fall 2001. [For details, see Consortiumnews.com’s “Bush’s Enron Lies.”]

In 2006, the “Enron loophole” allowed Amaranth Advisers hedge fund to shift its trades from the regulated New York Mercantile Exchange (NYMEX) to the unregulated Intercontinental Exchange (ICE) in Atlanta.

John McCain was near the bottom of the bottom of his Naval Academy class.

An unintentionally hilarious interview with Gramm on the Wall Street Journal editorial page last week asserted that Gramm has "been a key instigator of some of the biggest money-making UBS deals of recent years." The interview was noteworthy not just for first-class butt-kissing, but for deliberately gliding over the avalanche of disasters in the past year that has turned UBS from a respected Swiss titan of discretion and risk management into a laughing stock. As this one-year chart shows, UBS's stock lost nearly 70 percent of its value and now stands at levels not seen since 2002, when Gramm signed up.


The Commodities Future Modernazation Act  Revised through September 30, 2004
TITLE III—LEGAL CERTAINTY FOR SWAP AGREEMENTS
* * * * * * *
SEC. 304. ø7 U.S.C. 1 note¿ SAVINGS PROVISIONS.
Nothing in this Act or the amendments made by this Act shall
be construed as finding or implying that any swap agreement is or
is not a security for any purpose under the securities laws. Nothing
in this Act or the amendments made by this Act shall be construed
as finding or implying that any swap agreement is or is not a futures
contract or commodity option for any purpose under the Commodity
Exchange Act.
* * * * * * *
TITLE IV—REGULATORY RESPONSIBILITY FOR BANK PRODUCTS
SEC. 401. ø7 U.S.C. 1 note¿ SHORT TITLE.
This title may be cited as the ‘‘Legal Certainty for Bank Products
Act of 2000’’.
SEC. 402. ø7 U.S.C. 27¿ DEFINITIONS.
(a) BANK.—In this title, the term ‘‘bank’’ means—
(1) any depository institution (as defined in section 3(c) of
the Federal Deposit Insurance Act);
(2) any foreign bank or branch or agency of a foreign bank
(each as defined in section 1(b) of the International Banking
Act of 1978);
(3) any Federal or State credit union (as defined in section
101 of the Federal Credit Union Act);
(4) any corporation organized under section 25A of the
Federal Reserve Act;
(5) any corporation operating under section 25 of the Federal
Reserve Act;
(6) any trust company; or
(7) any subsidiary of any entity described in paragraph (1)
through (6) of this subsection, if the subsidiary is regulated as
if the subsidiary were part of the entity and is not a broker or
dealer (as such terms are defined in section 3 of the Securities
Exchange Act of 1934) or a futures commission merchant (as
defined in section 1a(20) of the Commodity Exchange Act).
(b) IDENTIFIED BANKING PRODUCT.—In this title, the term
‘‘identified banking product’’ shall have the same meaning as in [snip]

Testimony Concerning S. 2697, The Commodity Futures Modernization Act of 2000
By Chairman Arthur Levitt
U.S. Securities & Exchange Commission
and Committee on Banking, Housing, and Urban Affairs
United States Senate June 21, 2000
Chairman Lugar, and Members of the Committees PDF:

TESTIMONY S.2697, as introduced, differs from the Working Group’s recommendations regarding legal certainty in several key respects. The Commission staff would be happy to discuss those differences in detail with you or your staff and provide technical assistance to the Committees. But today, I want to focus on a provision in the bill that would have significant implications for the integrity of the market for a wide-range of securities-based derivatives. Section 23 of the bill would exclude from the securities laws – and their widely enjoyed protections – any swap agreement. We see no public policy justification for this far-reaching provision.[snip]

B. Comparison to S. 2697

Crafting our plan was not easy. Therefore, I appreciate your efforts in drafting the bill. Moreover, I am heartened by the bill’s attempt to recognize some of the principles that the Commission feels are so important in this area. Unfortunately, as written, the bill ultimately does not vindicate those principles and achieve the goals of the legislative framework previously outlined. The bill does not sufficiently extend the protections of the securities laws to single stock and narrow-based stock index futures. The Commission therefore could not support the legislation in its current form.

As you continue to revise your legislation, I would hope your bill ultimately can answer questions, such as the following, in the affirmative:

• Does the bill clarify in both the CEA and the securities laws that the SEC has full authority over single stock and narrow-based stock index futures and that the securities laws protections apply to these products?
• Does the bill provide for expedited registration of the intermediaries and exchanges that trade these products with both the SEC and the CFTC?
• Does the bill provide real mechanisms for both the SEC and the CFTC to ensure that the relevant securities and futures regulations, such as those related to margin, remain harmonized on an ongoing basis?
• Are there provisions for coordinated clearing of these products?
• Are there provisions that enable the CFTC and SEC to work together to foster competition in the markets for these products?
• Will both the CFTC and SEC be able to effectively prosecute frauds involving these products?

The staff and I look forward to providing additional technical assistance to help you reach the right answers for our markets.

Report of the President's Working Group on Financial Markets, Over-the-Counter Derivatives Markets and the Commodity Exchange Act (Nov. 1999).
http://www.sec.gov/news/testimony/tsty2999.htm

According to data from the Bank for International Settlements, at the end of June 1999, the total estimated notional amount of outstanding OTC derivative contracts was $81.5 trillion. The Global OTC Derivatives Market at end – June 1999, 45/1999E (Nov. 25, 1999) <http://www.bis.org/press/index/htm>.

See Testimony of Annette L. Nazareth, Director, Division of Market Regulation, U.S. Securities and Exchange Commission, Concerning the Report to Congress on Over-the-Counter Derivatives Markets and the Commodity Exchange Act by the President’s Working Group on Financial Markets, Before the Subcomm. on Risk Management, Research and Specialty Crops, House Comm. on Agriculture (Feb. 15, 2000). See also Testimony of Annette L. Nazareth, Director, Division of Market Regulation, U.S. Securities and Exchange Commission, Concerning Recent Recommendations by the President’s Working Group on Financial Markets, Before the House Comm. on Banking and Financial Services (Apr. 11, 2000); Testimony of Annette L. Nazareth, Director, Division of Market Regulation, U.S. Securities and Exchange Commission, Concerning the Report to Congress on Over-the-Counter Derivatives Markets and the Commodity Exchange Act by the President’s Working Group on Financial Markets, Before the Senate Comm. on Agriculture, Nutrition, and Forestry (Feb. 10, 2000).

Letter from the Honorable Arthur Levitt, Chairman, SEC, and the Honorable William Rainer, Chairman, CFTC, to the Honorable Larry Combest, Chairman, House of Representatives Committee on Agriculture, the Honorable Tom Bliley, Chairman, House of Representatives Committee on Commerce, the Honorable Tom Ewing, Chairman, Subcommittee on Risk Management, Research, and Specialty Crops, House of Representatives Committee on Agriculture, and the Honorable Charles Stenholm, Ranking Member, House of Representatives Committee on Agriculture (March 2, 2000).

SEC Biography:Commissioner Annette L. Nazareth

The Working Group was given a fairly narrow task - to determine whether the Commodity Exchange Act ("CEA") provided an appropriate regulatory framework for the OTC derivatives markets. After studying the issues, the Working Group unanimously concluded that the CEA was not the appropriate framework for certain OTC derivatives. In addition, the Working Group determined that steps needed to be taken to ensure that the CEA did not stifle the natural development of these markets. For a more detailed discussion of the Working Group's recommendations, I refer you to my earlier testimony.³

The consensus achieved by the Working Group was of historic significance. Four of the leading U.S. financial regulators unanimously agreed that the Report's recommendations, which reflected their combined regulatory expertise, urgently required implementation.

In making its recommendations for the OTC derivatives market, the Working Group balanced the needs of users with the risk of abuses. The Working Group's recommendations for regulatory relief were limited to products traded by eligible contract participants. As a practical matter, institutional and other highly sophisticated investors are the main participants in the OTC derivatives market. The lines that the OTC Derivatives Report draws for exclusion from the CEA reflect the sophistication of market participants who will use the exclusion. The Working Group determined that these eligible contract participants do not have the same need for the protections of the CEA that retail investors do.

Testimony of Chairman Alan Greenspan
S. 2697, the Commodity Futures Modernization Act of 2000
Before the Committee on Agriculture, Nutrition, and Forestry and the Committee on Banking, Housing, and Urban Affairs, U.S. Senate
June 21, 2000

the CFTC proposes to transform itself from a frontline regulator, promulgating relatively rigid rules for exchanges, to an oversight agency, assessing exchanges' compliance with more flexible core principles of regulation.

The Federal Reserve Board supports the general approach to regulation that was outlined in the CFTC's proposals.

Mr. Newsome Testimony
http://commdocs.house.gov/committees/ag/hag1088.000/hag1088_0.htm

But the difficulty, I think, in looking at exchanged-traded of markets and how transparent they are versus the over-the-counter marketplace. On one hand you have a very transparent marketplace. Everyone knows the underlying terms and conditions of the contract, so price is meaningful. But on the other hand, where every contract could have differing terms and conditions, price is not necessarily meaningful unless you know everything that underlies it. So my concern has been that if you made transparent all this pricing information without knowing what underlies it, that that could actually have a negative impact upon the price discovery function of the contracts that we depend upon.
So I think some things that sound legitimate, once you look into them, can become very difficult, and I would just use that as an example. [sinp]

I continue to believe that the CFTC has the proper authority from the anti-fraud, anti-manipulation standpoint to do the job that you intended us to do when you passed the CFMA. If Congress decides that the CFTC should serve more of an upfront regulatory role in this marketplace, I just think that there needs to be a larger debate with market participants involved who are extremely knowledgeable about the Commission and our surveillance efforts, and I fear that debate hasn't been held enough to look at what are all the potential pitfalls or the unintended consequences.

Commodity Futures Trading Commission website.

Testimony of Patrick Parkinson
Deputy Director, Division of Research and Statistics
Commodity Futures Modernization Act of 2000
Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate
September 8, 2005
http://www.federalreserve.gov/boarddocs/testimony/2005/20050908/default.htm

The 2008 winner of the "Most oil money in a Presidential campaign" award is: Pres. Candidate John McCain
Accepted $1,344,838 in oil contributions to election campaigns since 2000. $46,900 of those dollars were from industry PACS. This number does not include money received by Senate campaigns, or leadership PACs.

MUST LISTEN
10.03.08 Chicago Public Radio - Another Frightening Show about the Economy
or Free Download
Prologue 3 minutes

McCain Aide’s Firm Was Paid by Freddie Mac
Published: September 23, 2008
WASHINGTON — One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.
The disclosure undercuts a remark by Mr. McCain on Sunday night that the campaign manager, Rick Davis, had had no involvement with the company for the last several years.
Mr. Davis’s firm received the payments from the company, Freddie Mac, until it was taken over by the government this month along with Fannie Mae, the other big mortgage lender whose deteriorating finances helped precipitate the cascading problems on Wall Street, the two people said.

Credit Default Swaps manages risk by 2004 the market became dangerous. It stopped being insurance and became speculation. Now it's like you buy protection for something you don't own. You're using an insurance policy to make a bet. A private deal between anyone or anything with more than 5 million.

60 trillion bet right now AND IT IS ALL UNREGULATED!