Fight the Derivatives Cancer with a Wall Street Sales Tax, Plus Bans on Hedge Funds, Credit Default Swaps, and Synthetic CDOs

http://tarpley.net/2010/04/25/fight-the-derivatives-cancer-with-a-wall-street-sales-tax-plus-bans-on-hedge-funds-credit-default-swaps-and-synthetic-cdos/

As a country that wishes to maintain our sovereignty we can no longer afford to overlook our own downfall, because it's plainly staring us in the face.
The games of speculation that the rich play behind the curtain place no value on human life. It's all only about the numbers in dollar signs and they create those numbers anyway they can and use our lives to do with as well as to bail them out when they fail. They only live because "WE" let them.
It's time to end this game before it ends all of us. As "the world's people", "WE" owe it to our selves.


The urgent problem raised by all this is the $1.5 quadrillion derivatives bubble. The financial crisis which struck the United States and the world in September and October 2008 was in fact a world a derivatives panic. This panic marked the first phase of a world economic depression caused by derivatives speculation. The second phase of this depression, which is now beginning, can also be attributed in large part to derivatives, since derivatives are the main tool being used in the speculative attacks on Greece, Spain, Portugal, Italy, Ireland, and other nations, building up towards a chaotic collapse of the euro.

Derivatives are the Cause of the World Depression of Our Time
Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like “toxic assets,” “exotic instruments,” and – most notably – “troubled assets,” as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008 with the support of Bush, Henry Paulson, John McCain, Sarah Palin, and the Obama Democrats.

Greek debt crisis: why the ECB is in no position to give lessons on transparency

http://blogs.telegraph.co.uk/finance/jeremywarner/100004157/how-the-ecb-has-contributed-to-the-greek-debt-crisis/

Inquiring minds want to know,
The big question is: What will they do about it, when they find out that "The Profiteers" (The Banks) once again rigged the bet to ensure the fall.


Regulators on both sides of the Atlantic have announced they are investigating trades in the euro and the market in sovereign credit default swaps (CDS), while on a flying visit to London, Michel Barnier, the European internal markets commissioner, has this week promised a regulatory crackdown on the CDS market.

At the very least M. Barnier wants to know who’s buying and for what purpose. He then wants the supposed speculators publicly to account for their actions. European Commission officials are meeting with bankers today (Thursday, 4 March) to decide what shape this crack down should take. If they are going to bail-out Greece, they want to know who stands to benefit and who to lose.

The first principle of regulatory interference in markets must be that there is evidence of public interest damage. In my view, the CDS market passes this test, and indeed always has done, only as with so much else, regulators were so busy with the trivia that they failed to notice the really important stuff. A CDS is a form of insurance, in that it insures against the risk of default, and yet it disobeys two of the most fundamental rules governing insurance.

The first is that the insured must own the assets being underwritten, this for the obvious reason that if he doesn’t the existence of the insurance provides an incentive to induce a loss

Bombshell in AIG 10Q

http://market-ticker.denninger.net/a...al-Relief.html

Oh so AIG does admit, that it knew they were writing credit default swaps
for the explicit purpose of getting around capital requirements - either by banking regulators or (possibly worse) EU sovereign regulations.
Sniff, sniff is that admitted fraud I smell?


A total of $150.0 billion in net notional amount of the super senior credit default swap (CDS) portfolio of AIGFP as of December 31, 2009, represented derivatives written for financial institutions, principally in Europe, which AIG understands to have been originally written primarily for the purpose of providing regulatory capital relief rather than for arbitrage purposes. The net fair value of the net derivative asset for these CDS transactions was $116 million at December 31, 2009.

So AIG "understands" that $150 billion of credit-default swaps were written by AIGFP to European Institutions (no note by the way as to exactly what's in there - or who owns them) for the explicit purpose of getting around capital requirements - either by banking regulators or (possibly worse) EU sovereign regulations.

When did they come to "understand" this? Did they write these swaps originally knowing that their essential purpose was to evade capital requirements, or was this a "recent" revelation of some sort?

Indeed, the section goes on to say