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The fleecing of America: The United States Covered Bond Act of 2011

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Marti Oakley(C) copyright 2011 All Rights Reserved

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Occasionally, amid the mountains of mindless legislation produced by those fools in congress, one or two really stellar examples of “what the hell were you thinking?” surfaces and leaves us wanting to bang our heads against the wall repeatedly out of frustration at the sheer stupidity of what is offered as necessary legislation.  Never has this been quite as extraordinary as it is in the Covered Bond Act of 2011, a bill that is intended to avoid the hassle and exposure of public debate over bailing out the criminals while leaving the country twisting in the wind.  Of course this will be supported by the full faith and credit (me & you) of the United States.

 Avery Goodman at www.seekingalpha.com makes this observation:

“So long as the Federal Reserve exists and/or other financial regulatory agencies continue to be run by a revolving door staff that moves in and out of industry and government, crony capitalism will be alive and well in America. No amount of Dodd-Frank or Volcker rule legislation will ever protect savers, taxpayers or the American people. Profits will continue to be privatized and losses socialized.”

This bill will just confirm the practice of privatizing profits while nationalizing the losses, as a legal response to criminal activity.

From the folks over at Patrick.net:

“The United States Covered Bond Act of 2011 is designed to allow bundling of any kind of debt including derivatives, into marketable securities guaranteed at full face value by the FDIC.”

Derivatives?  Weren’t those instruments the same ones that caused the near collapse of the system?  So what are they, exactly? More

Will the Agriculture Committee Hand Wall Street a Big Win on Derivatives?

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Open Congress.org

“an emerging strategy to put some relatively strong consumer protections in the bill while giving Wall Street much of what they want in areas that the public isn’t paying attention to. Derivatives reform — or the lack therof — is likely going to be the area where Wall Street gets their biggest win, and the Senate Agriculture Committee is set up to be the driving forces behind delivering it.”

“Words on the page are not that critical to the public. … The public just wants to see something done here. … To some extent, passing a bill [whatever the details] will be marketed as a success.”

April 6, 2010 – by Donny Shaw

Derivatives, those obscure financial products built off the value of other assets, have their historical roots in agriculture. Farmers and investors would place bets against the harvest as a way to hedge against the uncertainty involved in making your living off of raising food. The derivatives market is now a several hundred trillion dollar, highly complex financial market, but the congressional agricultural committees still hold legacy jurisdiction over regulating it.

TNR’s Noam Scheiber has a great piece on the state of financial reform in the Senate, describing an emerging strategy to put some relatively strong consumer protections in the bill while giving Wall Street much of what they want in areas that the public isn’t paying attention to. Derivatives reform — or the lack therof — is likely going to be the area where Wall Street gets their biggest win, and the Senate Agriculture Committee is set up to be the driving forces behind delivering it.

I’m going to excerpt a pretty big section of the article here — I hope you’ll read it and then click through to read the full article: More

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