Same ole same ole...its all easy when you gamble with other people's money...

The hypocrisy in the systems that we use for finance and government is a symbol of totally compromised ethics and values that are acceptable as long as you and your friends benefit. To think that our rights, environment and privacy will be protected while leadership is so conflicted is a pipe dream. The markets and the financial system will be used to drive the compromises of our rights while blaming the productive elements of our society while seeking to vindicate the parasites...fun times...all we have to do is watch Obama to see that happening.

Green Derivatives...just the thing to "fuel inject" the economic engine of the US

WASHINGTON (MarketWatch) -- Green Exchange got its approval from federal futures regulators this week to launch a trading platform that will list contracts tied to credits and allowances for greenhouses gases. 

The Commodity Futures Trading Commission said Friday it had approved the exchange's application Thursday. The announcement of its approval comes just one day after U.S. Senate Democrats decided to table a climate-change bill. That bill would have helped spur a much larger derivatives market to help companies offset their carbon emissions. 

Green Exchange was introduced in 2007 under the New York Mercantile Exchange and a group of banks and brokerages. Its products have been listed at Nymex, which is now owned by CME Group (CME 286.56, +4.84, +1.72%) . The CFTC said those products will now be listed on Green Exchange, which will become a stand-alone entity. 

A spokesman for Green Exchange couldn't be immediately reached for comment.
"We think the Green Exchange has all the right elements to really compete in the marketplace, and achieving the milestone of this approval one of those elements," said Evan Ard, managing director of Evolution Markets, a founding member of the venture. "But there's still a lot of work to be done to effectively compete in the marketplace." 

The CFTC's approval of the Green Exchange now sets the stage for competition between CME and its major rival IntercontinentalExchange Inc. (ICE 108.36, +1.84, +1.73%) , which this year acquired the Climate Exchange PLC (CLE.LN) in a $597 million deal. 

ICE's acquisition will make it a dominant force in Europe's estimated EUR100 billion carbon market. The U.S. market is still quite small, although it has great potential to grow. Point Carbon, a consulting firm, expects the global carbon market to grow $170 billion this year. 

Both CME and ICE are targeting European and U.S. markets with their ventures. But Point Carbon estimated in March that 63% of the trading in the U.S. carbon market was done off-exchange. 

Without a climate-change bill, it could be challenging for both exchanges in the U.S. to build emissions-trading businesses. 

CFTC Commissioner Bart Chilton, who has been advocating for a climate-change bill that will help create a large carbon futures market, said Friday he hadn't lost hope despite the Senate's inaction. 

"There has been and will be green trading," Chilton said. "The question now is when we will get it together and do what needs to be done for our planet. The added benefit to doing the right thing environmentally is that it will fuel-inject the economic engine of our democracy--something last I checked, we sorely need."

 Well, http://jessescrossroadcafe.blogspot.com posted this CFTC's Bart Chilton On Financial Reform, Position Limits, and Curbing 'Disruptive Practices' post. I have to tell you I gave Bart the benefit of the doubt in his statements and to make his case on the video...my feeling was that he was pontificating horse manure. If there was one thing this Financial reform bill was not it is "Heroic". Nor is it particularly patriotic. There are some things that are certainly constructive in it, but not things that big players will not be able to bypass if they really want to - and I am sure they do and will!

However, Chilton sounded like a government lobbyist to the US public not an official protecting them. I do not discount that he may actually mean some or all of what he says...but he lost all credibility with this BS in the article above. The absolute last thing we need are super leveraged derivatives on more products that only exist in the minds of a few computers owned by Goldman and JPM and a few other inside players.

If we trade carbon offsets or derivatives based on them we are really amplifying the problem that exists in many of the commodity markets regarding physical commodity fraud. For example, Gold and Silver vehicles - ETF's and futures. The Gold and Silver backing them, either does not exist in amounts required or does not exist at all. But the elements Gold and Silver actually do exist as physically identifiable objects with which it is possible to validate collateral or discover fabrication.

Green products, however, are quite a different story.  Carbon offsets and carbon trading have NO practical accountability and do not physically exist in an easily verifiable way that is enforceable or manageable.  Therefore, they have no verifiable price. That does not make for a quality market and will further undermine the futures markets in general. Why else do you think Al Gore went to Goldman Tax with the idea? Fraud is a great business. These products are fraudulent from the outset. Is that what will really drive "...fuel injection in the US economic engine"? Why not trade Mel Gibson derivatives via ICE...ohh, I forgot, we already very nearly do that!

Chilton is just one of the crew, in my book and simply adds more evidence to the pool that usurps integrity in the, so called, "Financial Reform Bill".

presenting the Finance not so "Reform" bill

I posted previoulsy regarding Warren Buffett's deplorable testimony in Washington regarding the rating agencies and specifically his Moody's service. Things are going swimmingly well for Mr. Buffett's agenda if you tally points by trying to benefit from the free cash being doled out by the government and being able to influence government and regulation. Under considered incarnations of the financial reform bill, Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) likely would be required to put up $6 billion to $8 billion in additional collateral on its $63 billion of index derivative contracts. Not to mention requirements on the huge CDS exposure that it has for municipal bonds. I am quite sure you know how this turned out (click here). We got the bill passed so Hathaway did not get a bill and does not need to post additional collateral on those positions. The reality is that Buffett does not have enough money to cover his CDS and other derivatives obligations in the case of a significant market event. The other reality is that is grandpa/uncle Buffett is really a leverage junkie, it will be a sad state of affairs when the tide does indeed go out.

Warren Buffett and other holders of derivatives lobbied hard to exempt existing derivatives contracts from the requirement to post collateral to cover possible losses.

It would now appear that these efforts paid off, with a letter from Senate Banking Committee Chairman Chris Dodd and Senate Agriculture Committee Chairwoman Blanche Lincoln – two of the main authors of the financial regulation bill – saying that the bill "provides legal certainty to those contracts currently in existence, providing that no contract could be terminated, renegotiated, modified, amended or supplemented" ex post facto.

Warren Buffett’s Berkshire Hathaway conglomerate holds $63 billion in existing derivatives contracts, according to Barclays Capital, so the assurance from lawmakers will save the company from having to commit enormous quantities of capital – possibly as much as $8 billion – to meeting collateral obligations.

Reportedly, the majority of the derivatives sold by Berkshire are equity-index puts, hedging against the possibility of a sustained collapse in stock prices.

I think that one of the greatest assumptions of those able to speculate with the shadow money system is based on there being always being a greater fool or a reasonable way to create one. The rating system was one way and Buffett clearly was deceptive or at the least disingenuous in his testimony regarding it.

Ironically, when the tide goes out...it may not only be JP Morgan and Goldman Tax's (not to mention the rest of the crew) lack of underwear we will be observing...(I for one do not particularly want to see Warren without skivvies) In any case, our revolutionary financial reform bill allows any entity to trade derivatives over-the-counter if they are using them for hedging purposes - for example an airline hedging jet fuel. I think we should get ready for quite a few off-balance sheet airline fuel hedging (I mean speculation) entities funded and run by our discount window supplied and over-leveraged pals...this finance bill is great at managing the people who did not need to be managed, while enabling wolves to roam free via big loopholes for types like Goldman and friends including our buddie Warren.





in case you are interested in seeing some of that testimony, here is a video below:



My comments on June 2nd:

Buffett simply dismisses the biggest bubble of all time as a "bubble-et" and that "...since 300 million people never saw it coming why should Moody's have been expected to see it"...on its face that is rediculous.

If the Finance Reform Bill was written by finance industry...

...how would it look? Try this on for size...

90+ years of financial abuse and nothings changed

Since 1913 our governmental system has been controlled by finance...after the meltdown and clear demonstartion of the hypocrisy of the system, reforms have been made, prognostications prognosticated and guarantees made...the irony is NOTHING's CHANGED!