"U.S., Europe at odds over derivatives"

[WhiskeyGirl]

NEW YORK - To European officials, financial derivatives are dangerous weapons that worsened Greece's debt crisis and should be curbed.

To Wall Street, they're tools that reduce risk and generate profits and should be left alone.

Now, regulators on both sides of the Atlantic are trying to figure out who's right and what to do about it. At stake are billions in profits that banks say would be threatened by too much regulation. Yet supporters of tougher rules say the global financial system is at risk as long as derivatives remain largely unregulated.

Just say no to derivatives.  Don't do it with taxpayer money. 

Follow the money...

European officials say some derivatives are too harmful to be left alone. They warn they may ban some credit default swaps, a type of derivative that insures debt. In a visit to Washington this week, Greece's prime minister argued that speculators were using the swaps to bet against his country's debt. He said this has escalated Greece's borrowing costs, making it harder to dig out of its debt crisis.

I wonder who's betting America will default?

As of Wednesday, the rate had fallen to less than $300,000 after Greece announced a $6.5 billion austerity package. Still, that's about 10 times the cost of insuring $10 million of U.S. debt.

Who wins when the US defaults?

Are there any examples of derivatives used to make life better for Main Street?

http://www.knoxnews.com/news/2010/mar/14/us-europe-at-odds-over-derivatives/

[WhiskeyGirl]

EU rebuff for Geithner over rules on hedge funds

By Nikki Tait in Brussels and George Parker in London

Published: March 12 2010 02:00 | Last updated: March 12 2010 02:00

Top European Union officials hit back yesterday at criticism from Tim Geithner, US Treasury secretary, who has accused Brussels of pushing ahead with protectionist rules to regulate the hedge fund and private equity industries.

A spokesman for Michel Barnier, the EU commissioner responsible for financial services regulation, said the bloc's proposed actions against hedge funds were in line with a decision by the Group of 20 to reinforce transparency in the financial system.

Gotta wonder, is it possible for Washington or any distant government agency, by regulation and legislation alone, to keep a gambling addict from losing control in a casino when they're constantly supplied with money provided by taxpayers?  They have no responsibility for their losses?

Maybe it's just too dangerous to give gambling addicts a blank check or bottomless taxpayer credit/debit card?

Alistair Darling, UK chancellor, has argued that hedge funds authorised by regulators to operate in one EU country should be allowed to operate under a "passport" in all other countries.

He has sided with Mr Geithner in opposing provisions that would require US hedge funds - or funds operating from London but registered for tax outside Europe - to seek approval in each European jurisdiction.

Countries unhappy with aspects of the proposed text are thought to include Ireland, the Czech Republic, Malta, Sweden and Austria.

Maybe some folks thing hedge funds or gambling is a bad thing?

Why shouldn't those peddling financial weapons of mass destruction seek approval in every nation/state they wish to operate?

Same with guns...would a national gun registry really keep guns out of the hands of criminals?

State regulation isn't perfect, but it is closer and more responsible to the community than Washington.

The Spanish compromise proposes allowing access, provided there are "appropriate co-operation arrangements for the purpose of systemic risk oversight and in line with international standards . . . in place between the competent authorities of the member state where the fund is marketed and the competent authorities of the AIFM".

Has Washington been 'competent' when it comes to financial oversight?  What about the job rotation?  Didn't they see or understand the problems with derivatives?

"All the guys here are very worried about the free flow of capital," said Javier Echarri, director-general of the European Private Equity and Venture Capital Association.

They don't seem to be worried about taxpayers who have to pay for the deception, bailouts, and loss of prosperity and jobs.

more here - http://www.ft.com/cms/s/0/0c82a4d2-2d78-11df-a262-00144feabdc0.html

Follow the money, it's all about greed.

Wasn't there a time of prosperity before derivatives and hedge funds?

Is 'derivative' another word for 'gambling'?

[WhiskeyGirl]

U.S. Treasury Secretary Timothy Geithner has warned the European Commission that its proposals for more restrictive regulation of alternative fund managers could affect cross-border investment, demonstrating how the controversial European Union directive could have transatlantic ramifications.

Mr. Myners didn't comment on what Geithner specifically said about the directive. However, according to two senior private equity sources with knowledge of the situation, Mr. Geithner was worried about the "third country" clause, which limits European Union investors from investing in non-EU alternative investment funds run outside the EU.

The U.K. has been one of the leading opponents to this proposal, arguing that it is protectionist and damages the interests of institutional investors.

What's missing from all of this?  Concern for taxpayers, all the little people in all of these nations.

more here - http://online.wsj.com/article/SB10001424052748703625304575115250708775486.html?mod=googlenews_wsj

How much are American's paying for AIG?  The AIG passthroughs to keep PRIVATE and FOREIGN banks solvent?

Who in Washington is looking out for Main Street?