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kpete Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 06:59 PM
Original message
GOP's Grassley joins Dems in passing limits on derivatives
Source: McClatchy

GOP's Grassley joins Dems in passing limits on derivatives

By David Lightman and Kevin G. Hall | McClatchy Newspapers

WASHINGTON The Senate Agriculture Committee on Wednesday approved by 13-8 tough new curbs on financial derivatives, including a ban on most direct bank trading of the tools, which played a big role in exacerbating the 2008 financial crisis.

Derivatives are financial bets between private parties. Their value is derived from movements of an underlying asset. Some derivatives, such as oil futures contracts, already are regulated and trade on an exchange. Congress is trying to address the over-the-counter products that are often called swaps because one party wants to swap a risk it's assumed to another party thats willing to shoulder that risk for a fixed price. Swap deals cover everything from movements in the prices of contracts for delivery of barrels of oil or bushels of wheat to changes in the value of the dollar versus other currencies. These swaps currently take place off regulated exchanges.

The ban would require banks to spin off divisions that trade in the lucrative but opaque financial instruments into free-standing subsidiaries.

The vote sent a strong signal that not only are Democrats eager to take bold steps to revamp the regulatory process, but also that Congress may enact a broad overhaul of Wall Street practices.




Read more: http://www.mcclatchydc.com/2010/04/21/92611/gops-grassl...
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bemildred Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:01 PM
Response to Original message
1. Why is the "Senate Agriculture Committee" offering it's opinion on this?
Would this not be banking or something like that?
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:04 PM
Response to Reply #1
2. In order to put their crops in every year, farmers borrow most of the
money from the banks.
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bemildred Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:08 PM
Response to Reply #2
6. That was not the question.
Is it ordinary for the Senate Agriculture Committee to weigh in on bills to regulate banking?
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:07 PM
Response to Reply #1
5. Commodities
Edited on Wed Apr-21-10 07:07 PM by SpartanDem
derivatives are used commodity trading
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bemildred Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:09 PM
Response to Reply #5
7. Please see post #6. nt
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AlinPA Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:05 PM
Response to Original message
3. Grassley's vote in committee does not mean he will vote for the bill; he will join the filibuster of
the bill. No way the republicans will allow this bill to pass.
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Zambero Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:52 PM
Response to Reply #3
9. That way he can claim he was for it...
before he was against it.
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 09:56 PM
Response to Reply #3
12. This could be very important for farmers who buy futures on certain
crops in order to insure that they can cover their contracts. It's sort of an insurance for their crops.
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Aristus Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:06 PM
Response to Original message
4. Yay! It's officially bi-partisan! Go, President Obama! It's time to put some hurtin' on
those Wall Street assholes... :thumbsup:
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earcandle Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:33 PM
Response to Original message
8. Glass Stegall, please. Although this is good news.
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underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 07:56 PM
Response to Original message
10. He is worried about the teabaggers
because, God knows, they are derivatives
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TomCADem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Apr-21-10 08:16 PM
Response to Original message
11. Or, McConnell Overplays His Hand
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