- There's your Problem Right There

Obama to Scold Wall Street

Among the various ways the brilliant financial minds of the Democrat leadership plan to 'reform' the banking system is by banning all swaps trading by banks. This will have the same effect on the American banking industry as banning the $1 dollar bill would have on the economy. Or rather, it would be the same as if we outsourced the $1 dollar bill to offshore banks. The business will continue same as before, it just won't include any US domiciled players, who will be forced to round all their business up or down.

You can always tell when someone is trying to scare the public because they specifically mention the notional size of the swaps market, which is in the trillions of dollars. but those are virtually meaningless numbers that never get paid out. Only the daily difference in pricing is every paid between the counterpaties. Those counterparties by the way, are all proffesisonal investors. No one is selling an interest rate swap to a miami beach widow.

How is it that the people in charge of writing the regulations can have so little idea of how the industry they're regulating works? How can they have so little idea the benefit that comes from it? A benefit which they're doing their best to see is eliminated. You can't have capitalism without capital or capitalists but Obama and the Democrat leadership are apparently going to try.

I know this is a bold statement, but this may very well be the STUPIDEST thing I've ever heard coming from Washington. It will do for banking what Jimmy Carter's energy policy did for the gas station business.