This article lays out how the "Commodities Futures Modernization Act that exempted from regulation energy trading on electronic platforms," which Phil Gramm and McCain both supported. Gramm's wife served on Enron's board of directors. Now we all know how Enron, "freed from regulatory interference. . .then used manipulative trading practices to game the California electricity market and drive up electricity prices across the states at the time."
McCain Defends 'Enron Loophole' | BaltimoreChronicle.com
The Commodities Futures Modernization Act is what allowed financial firms to sell credit default swaps (CDS), which were illegal before the Act was passed in 2000. Almost ALL congresspeople voted to pass it, Dems and Reps alike. Idiots! GovTrack: House Vote On Passage: H.R. 4541 [106th]: Commodity Futures Modernization Act of 2000
But it was Phil Gramm who initiated the Act, just after Bush was elected in 2000.
"A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing."
James Moore: A Nation of Village Idiots
There was a good story about these CDS's on 60 minutes tonight. You might be able to access it on the web later or tomorrow. They, the CDS, are the reason we are in this economic disaster.
Subprime mortgages were the vehicle that the financial companies used to make credit default swaps and, therefore, bankrupt themselves. But apparently, several hedge fund managers have made like 100 billion on their bets.
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