** Huzzah (or something) Nevada’s worn the dubious crown of The Highest Foreclosure State in the entire United States of America for five years. [LV Sun/Vegas Inc.] CoreLogic adds this bit of information to its report on foreclosures: “Median income fell by 2.3 percent from 2009 to 2010, and real median income has declined more than 7 percent since its peak in 1999.” And the housing bubble collapse demonstrated more than just how many foreclosures could happen in three years. It demonstrated how unregulated derivatives trading linked to the housing market could help bring our economy to its knees.
** “Think the bankers aren’t lobbying like crazy to go back to the good old days of the Wall Street Casino? Think the Republicans aren’t doing their very best to accommodate the bankers? Then look at what has been happening to the funding for the Commodity Futures Trading Commission, which has jurisdiction over the trading of those infamous credit default swaps which contributed much to the 2008 financial crash.
Back on February 24, 2011 the GOP controlled House announced passed a spending plan that would cut the commission’s funding by 33%. [NYT Dealbook] The commission has 680 employees to cover a $6 trillion market. However, what caught the bankers’ attention was the Dodd Frank Act provision intended to bring at least some oversight of the credit default swap trading. So, no employees no investigation/research and no investigation/research no rules.
On May 24, 2011 the Republican controlled House subcommittee voted to send a bill to the floor that would cut CFTC funding by 15%. The Republicans cited the need for “austerity” to justify cutting the agency’s funding, saying it had enough for its “core mission.” [Reuters] Yes, but not enough to implement the provisions of the financial regulation reforms needed to contain the ‘enthusiasm’ of the credit default swap traders.
June 16, 2011, the House passes the bill to cut back funding for the derivatives regulating Commodity Futures Trading Commission by 15%. [BloombergNews]
We move on now, to November 15, 2011 as the Republicans created this situation reported by Politico: “In light of the CFTC’s increased role in overseeing the derivatives market, the administration had sought $308 million for the new fiscal year that began Oct. 1. But under pressure from House Republicans, the agreement now is expected to come in closer to $205 million, a virtual freeze at current appropriations levels.” (emphasis added)
December 5, 2011: In the wake of the MFGlobal mess, the CFTC begs for additional funding to add staff in order to attempt to prevent another MFGlobal-type debacle. “Speaking before the US Senate Committee on Agriculture, Nutrition and Forestry last week, CFTC chairman Gary Gensler said: “Without sufficient funding for the [CFTC], the nation cannot be assured that this agency can oversee the swaps market and enforce rules that promote transparency, lower risk and protect against another crisis.” [Financial News]
December 8, 2011: Democrats in the U.S. House of Representatives announce the introduction of a bill which would ” allow the CFTC to cover its annual budget by collecting “modest” transaction fees from market participants, a system modeled on the Securities and Exchange Commission.” [Reuters]
December 15, 2011: The 11th hour spending authorization negotiations are hung up on several issues cited by Senate Democrats, “points of objection — including a funding cut to the Commodity Futures Trading Commission,..” [TPM]