Paul Richards

America Needs an Independent Clearinghouse for OTC, CDS

The Wall Street Journal reported on October 21st that "lobbying backlash builds in Congress." It seems that the same investment banks that put us in this crisis, and then went to Washington with their hands out for the bailout, are now using the bailout money to lobby on their own behalf! Senator Diane Feinstein said, "Federal dollars were not intended to be used for lobbying, and it would be unconscionable for these companies to misuse taxpayer dollars in this way."

The article goes on to say that Goldman, Morgan Stanley and Merrill are amongst those whose third-quarter lobbying "all equaled or exceeded the previous quarter." And this is after they went on the dole!

Imagine the chutzpah!

Does it defy belief that if they would use taxpayer money to lobby the government on their own behalf that they might also try to set up their own bucket-shop?

Let’s hope that all of these shenanigans do not end up costing we, the taxpayer, any more than they already have.

This Friday, let’s see if the Fed does the right thing and awards the $55 trillion credit swaps market to an independent clearinghouse, with a history of no defaults, or if our tax dollars were used to lobby and buy this market from Washington.