Sunday, November 18, 2012

Geithner's Final Trick: Bye Bye Dodd-Frank, Volcker Rule

By Bob English

The term "lame duck" ought to be reconsidered.  The notion of an impotent government official about to leave office, cleaning out his desk and taking his secretaries to lunch has been transformed into a time in which some of the most authoritarian measures may be taken by those in high office, as the limit to accountability asymptotically approaches zero.  While the POTUS has his recess appointments and pardons, Treasury Secretary Geithner has his own bag of tricks from which to pull a rabbit (or bird, as it may be) as he winds down his final days, waiting for his successor to be named later this month.

Late Friday, just before the sleepy Thanksgiving week when most Americans turn their sights to turkey, Geithner finally got around to dressing [down] his own turkey: Dodd-Frank.

DF is the financial regulatory monster which will create havoc over the entire financial industry, with new rules and regulations. But not for FOG (Friends of Geithner)

From the WSJ:

WASHINGTON—The Treasury Department provided traders of certain types of currency derivatives with an exemption to sweeping new market rules...
Indeed, there is much more to the story than even WSJ reports, because this measure may also remove Volcker Rule provisions that were supposed to limit banks' proprietary trading (see in particular footnote 126, which acknowledges Treasury's authority for exemption, but allows for an over-rule in the final Volcker Rule).

It will be the valiant lobbying efforts of JP Morgan et al that will determine the fate of a similar Volcker Rule exemption (see page 27 of Barry Zubrow's comment letter to the Federal Reserve; all 461 comments are here).

It is very important to remember that much of DF and VR shall remain intact as a suffocation machine against most of the financial sector as FOG gets its exemptions.

With a quiet pen stroke, Geithner exempted $410.8 trillion, or 64%, of the entire OTC derivatives market from impending clamp-downs, which mostly benefits FOG.

Note well, we are not fans of the DF Byzantine mess of "regulation," which we doubt a single Congressman read, or VR.  We only wish to illustrate yet again what you hopefully already know: banksters win by cronyism and back door deals, while all others are crushed by the FOG.


  1. FOG also works well for Financial Oligarchs, which both Red and Blue pander to.

  2. No acountability, why do any thing to better Tour country. Their is no honer whith the wicked.

  3. I certainly hope that somebody with nothing to lose realizes that there could be no more worthy target than this asshole