“Senator Lincoln’s bill will help protect the American people against another financial
meltdown,” said Masters.“This bill prescribes strong medicine for the swaps dealers and
major swaps players who almost bankrupted our financial system back in 2008.”

Senator Lincoln’s bill will limit manipulation and unchecked speculation by closing
loopholes and increasing transparency in the commodity markets, while also fully
exempting legitimate commercial hedgers who are the engines driving economic
recovery; generic for imitrex.These reforms will protect the American people from another bubble in food
and energy prices during the worst economic recession in decades. Generic for imitrex: this legislation is
particularly important as oil prices are nearly 80 percent higher than they were just a
year ago.

“I hope that the U.S.Senate will pass Senator Lincoln’s bill in its current form because it
is the strongest bill out there,” said Masters – generic for imitrex.“I hope that every Senator who is serious
about reform will stand strong against the onslaught of Wall Street lobbying; generic for imitrex. Generic for imitrex: it’s almost
certain that Wall Street’s lobbyists will seek to weaken this legislation by offering
amendments that attach loopholes to this bill.”

“Each Senator owes it to their constituents to make sure that they pass the strongest
reform bill possible,” Masters added.“Failure to do so will sow the seeds for the next
financial crisis.”

Michael Masters has testified eight times in the last two years as an expert witness
before the U.S – generic for imitrex.Congress on derivatives issues.He is the author of a series of reports
analyzing the 2008 commodities bubble called, “The Accidental Hunt Brothers.” For
more information, visit www.TheAccidentalHuntBrothers.com.
###

Treasury Deputy Secretary Neal Wolin brought his own lunch to the U.S.Chamber of Commerce — a knuckle sandwich.

He repeatedly pounded the Chamber’s lobbying and advertising blitz against the White House’s financial regulatory overhaul, accusing them of being misleading, dishonest, and “backward.”

He delivered his broadside standing on a podium within the U.S.Chamber while some of the group’s officials sat in nearby tables aghast at the pummeling.

“Despite the urgent and undeniable need for reform, the Chamber of Commerce has launched a $3 million advertising campaign against it,” Mr.Wolin said.“ Cialis online: that campaign is not designed to improve the House and Senate bills.It is designed to defeat them.”

(source: “Treasury’s Wolin Slams U.S.Chamber of Commerce,” Damian Paletta, Wall Street Journal, March 24, 2010).

It is great to see the Obama Administration turning its focus from Health Care to Financial Reform.  Cialis online: we definitely need the Administration’s leadership to get anything meaningful done.  Cialis online: the motives of the U.S.Chamber of Commerce needed to be unmasked; cialis online. The truth is that Wall Street has been using the Chamber to try and defeat this legislation – not improve it; cialis online. I am glad that they are being called on the carpet; cialis online.

This is a defining moment for reform; viagra online without prescription. Viagra online without prescription: we have the chance to enact the strongest, most important financial reforms since those that followed the Great Depression.At this stage, the debate is not really about financial reform or no reform; about re-regulation or deregulation – viagra online without prescription. It’s a debate about ideas viagra online without prescription, and about the best ways to improve an undeniably flawed system; about the role of government; about the balance between efficiency and stability; about how to protect consumer choice and financial innovation, while constraining predation and fraud; and about getting the incentives right.

There is no serious case against fundamental reform of consumer protection laws and enforcement, against oversight of derivatives markets, against strong constraints on risk taking of the largest institutions, better tools for unwinding failing institutions.

It is worthwhile to read the whole thing HERE.

I am glad to hear Secretary Geithner speak so forcefuly for financial regulatory reform.

Watch CBS News Videos Online

Visit msnbc.com for breaking news, world news, and news about the economy

Word is we’ll see the discussion draft next Monday and the Mark-up will be the week of the 22nd.

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Today, he is emerging as one of the nation’s archreformers, pushing to impose some of the most stringent new financial regulations in history….

– online viagra…Ms.(Brooksley) Born is convinced of Mr.Gensler’s reformist zeal online viagra, as he takes on Wall Street in what is becoming one of the fiercest battles over regulation in the postcrisis era.

“I think he is doing very well,” she said in an interview.“He certainly seems to be committed to robust oversight of derivatives and limiting excessive speculation and leverage.”

(source: “Goldman Deal-Maker Now Advocates Regulation,” Graham Bowley, New York Times, March 10, 2010.)

Nobody has been a stronger or more forceful advocate for true financial reform than Gary Gensler.  If Congress fails to pass meaningful financial reform legislation it will be despite the tireless efforts of Chairman Gensler – online viagra.

Crude futures are doing a slow-motion backflip, stoking speculation about the next move for oil prices.

The futures curve, plotted with prices of oil to be delivered in successive months, has flattened; accessrx.Late last year, a barrel of US oil for immediate delivery cost $2.35 less than one due a month later; accessrx.Today the spread is about 40 cents, approaching the narrowest in 1½ years.

Several Wall Street analysts say the market is poised to flip even further, with spot prices rising above longer-dated futures for the first time since mid-2008; accessrx.The inverted price pattern they envisage – called “backwardation” among economists – would signal a world in which oil demand catches up with supply after a severe, recession-induced lag; accessrx.This would skim excess inventories from storage terminals.

(source: “Oil futures turn upside down accessrx,” Gregory Meyer, Financial Times, March 8 2010.)

Here’s your guide to what will happen if crude oil futures prices move into backwardation and stay there:

(1) Crude inventories will drop precipitously and head-in-the-sand economists will say “see the market anticipated the rising of demand” and they will be wrong because inventories are largely held by “cash and carry” arbitrageurs who will sell their physical holdings of oil to take their profits on the trade.

(2) Every commodity index salesman in the world will speed dial every institutional investor that he’s talked to about commodity indices in the last 3 years and tell them “there’s never been a better time to invest in commodities” because, of course, oil is as much as 40% of these indices and the “roll yield” is critical to returns.  In a contango market investors face a stiff headwind, but in a backwardated market they experience a nice tailwind.

(3) Huge amounts of money will begin to flow into these investments as an “inflation hedge.”  The amount of money will dwarf the $60 – $100 billion that poured into commodity investments in 2009.  It was the flattening of the oil futures curve in 2007 that set off the “gold rush” mentality that caused the Great Oil Bubble of 2008.

(4) You will have numerous Wall Street banks out there touting oil as an inflation hedge, making $200 per barrel predictions, etc.  All this will be necessary to help the salespeople get more investors to enter the trade, keeping the good times rolling while the bubble expands.  Rising oil prices will become the self-fulfilling prophets of inflation.

Make two additional notes regarding why oil prices might skyrocket:

First, the CFTC’s attempt to limit speculation with it’s Position Limit Rule (which does not tackle passive commodity investment) will either be defeated because Commissioner Dunn refuses to vote responsibly or it will lack teeth because it is adopted in its currently weak state (92,000 contracts is so high it’s like no limit at all).

Second, while many Democrats will shriek and wail about “speculation” it will take them weeks if not months to hold all the hearings, craft bills, etc.  And because it is an election year the Republicans will ridicule them while chanting “drill, baby, drill.”  Wall Street lobbying efforts will delay any legislation by months – just enough to get us to the election recess.

The greatest risk to this analysis is the initial premise that oil futures prices will become backwardated “and stay there.”  As the huge cash and carry trades are unwound the selling of spot oil and the buying back of longer-dated futures would tend to exert a contango-like effect.  Likewise as the amount of money being rolled by investors grows that also would tend to push things toward contango.  If the producers scramble to hedge by selling production forward and/or the consumers decide to hedge less and therefore buy less then that might be enough to tip the curve into a sustained period of backwardation.  For that reason I think we need to be in backwardation for 3-6 weeks before this whole juggernaut starts snowballing.

UPDATE: Goldman Sachs released a report today (3/12) entitled “Timing the return to backwardation as the cycle turns” in which they predict the oil market will return to backwardation by this summer (see #4 above).

All I can say is “Hold Onto Your Hats!”

In truth, “too big to fail” is not the worst thing we should fear – our financial institutions are now on their way to becoming “too big to save”. In 1929-30 order viagra, even if the federal government had wanted to put in place a big fiscal stimulus, it could only have mounted something around 1 percent of GDP; the financial shock of that day was much bigger. Perhaps monetary policy in the early 1930s could have done more, but today we have already pushed “quantitative easing” (meaning that the Federal Reserve buys junk) beyond recorded limits; order viagra. How much do you want to gamble that, next time, the Fed can do enough to save the day without also creating massive collateral damage?

If we continue to allow banks to grow, as they have over the last 30 years – and did again through the latest boom-bailout-rescue cycle – we head towards a day when Mr; order viagra.Geithner or his successor will try to save the financial system and will fail.

You might think that is a good thing and for sure it will bring on a big change in creditor attitudes and presumably much stronger regulation. But order viagra, just as in the 1930s, first we will have to dig out from under a lot of economic rubble – and we’ll lose a lot more than 8 million jobs.

(source: “They Saved the Big Banks But Kind Of Lost The Economy Doing It,”  Simon Johnson, The Baseline Scenario Blog, March 8, 2010)

I have heard some people say that even if we don’t get financial reform this time around we’ll get it after the second crisis.  Unfortunately, I am not so sure what will be left after the second crisis.

KW: Wall Street’s attempts to analyze and man- age risk were a key part of what went wrong and led to the credit bust.That was an obvious lesson we failed to learn from LTCM; buy viagra.

JR: That’s right.Western capital markets came to the brink of collapse in 1998, when hedge fund Long Term Capital Management, with a trillion dollar web of counterparty risk at all the major banks and brokers of the time, failed.Then Fed Chairman Alan Greenspan and Robert Rubin, who at that juncture was Treasury Secretary, called it the worst financial crisis in 50 years.While the amounts involved and the duration of that crisis pale next to what we’ve been going through since 2007, it certainly didn’t feel minor at the time.

KW: You can say that again.

JR: I know, I was there; buy viagra. Buy viagra: as general counsel of LTCM, I negotiated the bailout which averted an even greater disaster at that point.What strikes me now, looking back, is how nothing was changed; no lessons were applied.Even though the lessons were obvious, in 1998.LTCM used fatally flawed VaR risk models; buy viagra.LTCM used too much leverage; buy viagra.LTCM transacted in unregulated over-the-counter derivatives instead of exchange-traded derivatives – buy viagra.So risk models needed to be changed, or abandoned; buy viagra.Leverage had to be slashed.Derivatives had to be traded on exchanges or cleared through clearinghouses – buy viagra.Regulatory oversight needed to be ramped up.

KW: But none of that happened.

JR: Even worse buy viagra, the government did just the opposite.Glass-Steagall was repealed in 1999, so that banks could become hedge funds.The Commodities Futures Modernization Act of 2000 permitted the creation of more unregulat- ed derivatives. Buy viagra: the Basle II Accords and changes in SEC regulations in 2004 permitted more leverage. Buy viagra: the U.S., in effect, stared near- catastrophe in the eye, with LTCM, and decided to double-down.

You can read the whole interview HERE.

P.S.If you’re an investment professional and you don’t get Welling @ Weeden – you should.

Viagra on line: as piles of base metals from aluminium to nickel build up due to poor demand, Goldman Sachs and JPMorgan have entered the little known but very profitable business of metal warehousing.The deals reflect banks’ appetite for exposure to physical commodities beyond traditional commodities derivatives – viagra on line….

Traders say the bank decision will reshape the close-knit warehousing industry as Goldman Sachs and JPMorgan will control the depots where more than half of the LME’s registered stocks are held.The LME is the world’s largest metal exchange.

(source: “Goldman and JPMorgan enter metal warehousing,” Javier Blas, Financial Times, March 2 2010.)

Here are a few questions everybody should ask:

(1) Are the profit margins so good in metals warehousing that they exceed the profits on the banks’ other businesses?

(2) If not, why would these banks being paying handsomely to be in this business?  Could it have something to do with the ability to influence prices by controlling the physical supply of these commodities?

(3) Why has the Federal Reserve given these banks sweetheart exemptions from the Federal Reserve rules which prevent banks from being in the physical commodity business?

(4) Should banks be encouraged to spend billions of dollars to gain control over world metals markets instead of being encouraged to perhaps make loans within the United States to help revive the shattered U.S – viagra on line.economy?

(5) Does anyone besides me get a sinking feeling learning that these two banks will control half of the inventories at the LME?

Federal Reserve Bank of Dallas President Richard Fisher called for an international pact to break up banks whose collapse would threaten the financial system, a position that goes beyond other Fed officials.

“The disagreeable but sound thing to do” for firms regarded as “too big to fail” would be to “dismantle them over time into institutions that can be prudently managed and regulated across borders,” Fisher said in a speech at the Council on Foreign Relations in New York – cialis on line….

“Given the danger these institutions pose to spreading debilitating viruses throughout the financial world, my preference is for a more prophylactic approach: an international accord to break up these institutions into ones of more manageable size,” said Fisher, 60; cialis on line.“ Cialis on line: if we have to do this unilaterally, we should.”

(source: “Fed’s Fisher Calls for Accord to Break Up Big Firms (Update2),” Scott Lanman and Michael McKee, Bloomberg, March 3, 2010.)

It is unbelievable to me that this is not what everyone is saying!  Hard to believe that there are so many people that think “yes, we should have banks that are so big they receive automatic bailouts with taxpayer’s money.”

This will be one of the best books detailing the Financial Crisis.  From the same man that brought us Liar’s Poker, The Blind Side and Moneyball.

Even as many Americans still struggle to recover from the country’s worst economic downturn since the Great Depression, another crisis – one that will be even worse than the current one – is looming, according to a new report from a group of leading economists, financiers, and former federal regulators.

In the report, the panel, which includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high-risk investing that precipitated the near-collapse of the U.S; accessrx.com.economy in 2008.

The report warns that the country is now immersed in a “doomsday cycle” wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management – and when the risks go wrong, the banks receive taxpayer bailouts from the government.

(source: “Economists: Another Financial Crisis on the Way,” Matthew Jaffe, ABC News, March 2, 2010.)

The moral hazard of “too big to fail” and the resulting excessive risk-taking in the future by these banks has been well documented.  Unfortunately the fact that Wall Street has “bought and paid for” both Houses of Congress is also well documented.  At the end of the day this report should matter greatly and financial regulatory reform should be “beefed up” but given the control Wall Street has over Washington DC it would be a great victory if the bill does not get watered down completely.

Here is one example from Politico:

When President Barack Obama unveiled new restrictions on banks last month, he warned that the industry would fight it and vowed: “If these folks want a fight, it’s a fight I’m ready to have.”

Tough talk, but it was hard to know how seriously to take it, because the president has sent a series of conflicting messages about Wall Street and a host of other big special interests he vowed to confront when he came to office.

In a Dec.13 interview with “60 Minutes,” for instance, Obama described Wall Street chieftains derisively, calling them “fat cat bankers.”

The next day, after meeting privately at the White House with some of those bankers, the president emerged to announce that he had had a “candid and productive meeting with the CEOs of 12 of our nation’s largest financial institutions” and that he wasn’t interested in “vilifying any one person or institution or industry.”

Throughout his first year in office, Obama has vacillated between his pragmatic legislative instincts and the power of populist messages that can prompt cheers from his progressive base; buy cialis….

Obama’s message has been especially contradictory in the run-up to the Senate debate over a proposal to revamp regulatory oversight of the financial services industry buy cialis, an issue expected to come to the floor this week.

In addition to the jarring shift in tone after the December “60 Minutes” interview, Obama on Jan.6 previewed a new bank tax with reporters buy cialis, saying “financial firms play an essential role in our economy” and that the purpose of the tax was “not to punish the financial industry” but simply to recover the bailout funds.A week later, while officially unveiling the plan, a defiant president grabbed headlines by declaring: “We want our money back, and we’re gonna get it!”

The president was still in a combative mood a week later, when he unveiled new reforms to rein in banks and labeled the latest round of bonuses “obscene.” But two weeks later, the president told Bloomberg News that he didn’t “begrudge” the $26 million in bonuses awarded to Jamie Dimon of JPMorgan and Lloyd Blankfein of Goldman Sachs.

“I know both those guys; they are very savvy businessmen,” Obama said, setting off a scramble by White House blog writers to try to explain the contra(di)ction.

(source: “President Obama’s mixed message about Wall Street,” Jeanne Cummings, Politico, March 1, 2010.); buy cialis

Key senators are expected to scrap President Barack Obama’s proposal to prohibit commercial banks from risky trading activities, people close to the matter said, a setback for the administration’s bid to limit the size and scope of the largest banks.

The proposal, dubbed the “Volcker rule” after former Federal Reserve Chairman Paul Volcker, would have essentially stopped commercial banks with federally insured deposits from owning a division that makes risky bets with its own capital.

But after resistance from lawmakers from both parties, Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and other legislators are expected to introduce a plan next week that would give regulators more discretion to limit and potentially ban risky trading at banks, especially if it poses a risk to the broader economy – online cialis.The measure would stop short of banning such trading outright.

(source: “Attempt to Curb Risky Trading Hits Senate Wall,” Damian Paletta, Wall Street Journal, February 24, 2010.)

Well that didn’t take long – it was fun while it lasted.

So clearly since this is such a critical priority for Obama he has come back swinging against Dodd and others, right?  Nope, nary a peep.

Well I guess Volcker is going to be sent down to the minor leagues after his call  up 6 weeks ago.  Bye Paul.

Viagra online pharmacy: derivatives are meant to help lower risk and make it easier to discover the price of risks and assets.But unregulated derivatives heightened and concentrated risk and lessened transparency, making it harder to price risks and assets; viagra online pharmacy.US taxpayers bailed out AIG with $180bn when that company’s ineffectively regulated $2 viagra online pharmacy,000bn derivatives portfolio, managed from London and cancerously interconnected to other financial institutions, nearly brought down the financial system.As we later learnt, much of the bail-out money flowed through AIG to US and European banks.The recent chill winds affecting the euro have further revealed how derivatives can be used by a sovereign country, such as Greece, to borrow from a financial institution, while obscuring the embedded loan.

(source: “How to stop another derivatives inferno,” Gary Gensler, Financial Times Op-Ed, February 24 2010.)

Read the whole thing because literally your livelihood might depend on it.