Republican lawmakers have urged Democrats to take more time to go over the administration’s proposal Bush’s plan for mortgage/banking regulation. Senator Jim Bunning, Republican told a banking committee hearing. “But no, it turns out socialism is alive and well in
Well yes sir, it is, it just depends on which brand you prefer. Obviously corporate welfare is still the preferred model for Republicans. Apparently some lawmakers are facing tough re-election contests want to reaffirm their identity as budgetary hawks while publicly breaking with the deeply unpopular, lame-duck Bush administration.
It is little wonder just 23 percent giving it a positive rating with these sort of antics. But people aren’t getting angry about the economy being jerked around for the sake of a few votes. They aren’t even angry about McCain’s moronic “I know how to win wars”. Nope it is the depiction of Obama on the front of the New Yorker that is causing the greatest angst.
Fortunately for Americans, and the rest of us I should add, the US Securities and Exchange Commission (SEC) is not asleep at the wheel and are taking action within their own charter.
The SEC is invoking emergency powers to limit "short selling" in Fannie Mae and Freddie Mac shares, as well as in stocks of major brokerages and is considering extending the order to the rest of the market as well.
The House Financial Services Committee would do well to focus on some of the unethical and illegal methods employed by the
Short selling - Short sellers borrow stock and sell it, betting the price will drop. If their bet is correct they can buy new shares later at a lower price, repay the borrowed stock, and pocket the difference between the sale price and the repurchase price.
So-called naked shorting, which is selling stock without actually having the shares in hand or located. Naked shorting already is illegal, but the rule against it hasn't been widely enforced.
The SEC is looking to lock up Fannie and Freddie shares, preventing them from being borrowed by other short sellers. A cynic might suggest this as a good method to short circuit some of the pay off methods from lobbyists to Republican lawmakers.
2 comments:
Hi Cart. I also think lawmakers need to investigate whether speculators are manipulating or influencing the price of oil, additional to the SEC’s recent initiative on illegal naked short selling of financial stocks which you mentioned. It’s almost as if by royal decree Fannie and Freddies share prices have rebounded strongly since these moves were first mooted by the SEC.
Markets are driven by sentiment and in the long term by fundamentals, but equally the regulator needs to keep his eye on the ball, to have ongoing governance responsibility.
Best wishes
Yes Lindsay, funny about Fannie and Freddies. The oil issue is more problematic, if only because of the fear of talking conspiracies. I predicted, prior to the 06 mid terms that gas prices would drop, and they did! Rising steadily again after the election.
But there are some issues I believe can be demonstrated, which preclude conspiracy:
The US President and VP have big interests in the oil industry
The major producers are famously a cartel
The major distributors, e.g.: big oil, are increasingly being shown to act as a cartel
In fact it is more difficult to justify myth of the speculators and spot market driving prices. The oil industry is too regulated from within for such vagaries.
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