Add climate change as another villainous use for credit default swaps. Up until now it had been thought that the derivatives' primary contribution to global warming was the heated debate that the swaps frequently engender.
However, the House of Representatives saw enough danger to include a ban on
"naked" credit default swaps and a requirement that over-the-counter derivatives go through central clearinghouses in the environmental bill that it passed last Friday, according to
Reuters. The swaps found their way into the climate change bill as Congress added provisions to set position limits on energy traders and bring energy swaps under the oversight of the Commodity Futures Trading Commission.
"Naked" swaps are contracts bought by speculators that don't actually hold the underlying bonds on a company, essentially allowing them to gamble that the company will default on the debt. Curbing "naked" swaps and requiring trading through a clearinghouse are both included in a omnibus
regulatory reform bill expected to be worked out in the fall.
The Senate hasn't included the instruments in their version of the bill, so unless they get included in a reconciliation process, ending the danger credit default swaps represent to Mother Nature may have to wait. -
George White See Reuters storySee Deal magazine story on credit default swaps
See Deal magazine story on regulatory reform bill
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Obama claimed that the average American would not bear the brunt of this historic tax-increase: he stated that instead "“It is paid for by the polluters who currently emit dangerous carbon emissions.”
Just compare this outrageous falsehood to Ronald Reagans' famous quote:
"The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us.
...Only people pay taxes, and people pay as consumers every tax that is assessed against a business."
And after the way the rammed this through the House with little debate, without legislators even reading it... and while quarantining the GOP from any meaningful input whatsoever, any foolhardy individuals who still believe Obama's threadbare "bipartisanship" spiel ought to have their head examined.
http://reaganiterepublicanresistance.blogspot.com/