Wednesday, December 16, 2009

Fight against Casino Capitalism

Dear Friend,

Financial derivatives are extremely complicated financial instruments used to speculate on the future value of an asset. In other words, Wall Street uses derivatives to gamble. It was this kind of gambling that led to the collapse of Bear Stearns and Lehman Brothers and brought the U.S. financial system to its knees.

But after everything we have been through, very little has been done to change the system. The $590 trillion - yes trillion - derivatives market is still largely unregulated, opaque, and poses an enormous risk to our financial future.

This is "casino capitalism," and the first step to reform is to treat derivatives trading for what it is - gambling. That is why I have introduced legislation to allow state gaming authorities to regulate derivatives markets.

Please sign the petition and show your support for regulating derivatives markets.

This is not a new concept. Until 2000, this is exactly how derivative trading was regulated. At that time Congress granted an exemption from gaming laws for derivative markets and opened the door for the irresponsible speculation that nearly destroyed the U.S. financial system. My bill would repeal this exemption and help avoid repeating our past mistakes.

This is going to be an uphill battle. Derivatives regulation may be one of the most complicated issues Congress must tackle to restore true stability to our financial system. Wall Street has some of the most highly paid and highly skilled lobbyists on Capitol Hill. They will continue to exploit the complexity and simply say, "this is impossible for you to understand, just let us self-regulate." This is exactly what happened last week in the House of Representatives, when lobbyists successfully inserted several terrifying loopholes in the House financial reform bill.

The only way we can overcome this massive opposition is with massive popular support -- and that starts with you. Financial reform is making its way to the Senate floor. Now is the time to regulate and now is the time for you to make your voice heard.

Please sign the petition today.

Thank you,

Maria Cantwell

1 comment:

Chad Lupkes said...

---------- Forwarded message ------
From: frank bown
Date: Sat, Dec 26, 2009 at 4:11 PM
Subject: Re: g-wave attempt
To: Chad Lupkes


I've been wanting to post the following on the blog that links to Robert Kuttner's article in The American Prospect about Senator Cantwell. Since I'm not able to log on to that blog, I'll just have to submit my reaction to Kuttner's praise of Sen. Cantwell as follows:

Sen. Cantwell and Mr. Kuttner seem to be working from the assumption that the economy is a mechanism that can be top-down managed or "regulated" by a few sufficiently smart people with lots of authority. There are a number of problems with this view, including:

1) An economy consists of millions of non-linear thinking human beings rather than the kind of predictable entities one would find in physical systems that obey discernible laws and can therefore be engineered and controlled.

2) The story of regulation in our economy is one of abysmal failure. The most recent collapse of our nation's capital structure occurred despite vast power on the part of government and Federal Reserve authorities to oversee financial institutions. Firms such as Bear Stearns and Lehman Brothers, etc. were allowed to conduct unsound operations, despite plenty of oversight authority on the part of institutions like the Federal Reserve Bank of New York, which at the time was headed by present Treasury Secretary Timothy Geithner.

And speaking of the Federal Reserve, let us not forget that its artificially created credit empowers speculative bubbles in dubious assets like sub-prime mortgages or wild derivative contracts. And it is this artificially low-interest credit that is now impoverishing ordinary savers just to enable the likes of Goldman Sachs to earn a nice guaranteed spread, strengthen their balance sheets, and pay themselves nice bonuses.

Please, Sen. Cantwell, put a hold on Ben Bernanke's reconfirmation until the American people can see how they're being swindled.


Frank Bown