Yesterday, my daughter raked my wife and I over the coals and into utter financial destitution. Fortunately it was just a game. As asian markets had a minor meltdown, my wife, daughter and I played Monopoly(R). The game teaches an important lesson. Monopolistic greed is savagery. I post this opinion today because I was gravely shaken by what I read this morning on KD’s Market Ticker http://www.market-ticker.org. First the primer: The CDO and CDS “market” is a scam. The banks have a fancy excel sheet which takes prices of various bundled securities and formulates a price. “Market” participants can buy and sell these derivative securities, even though the participants can include the banks involved in calculating and fixing the price! Because the little guys can’t see the formula, they are in essence the smelt in the fish tank while the large OTC dealer banks are the apex predators.

AIG was the patsy in the game concocted by GS, JPM, and the rest. And We the People have been left holding the bill. Some racket! Even more important, the regulators who are supposed to protect the taxpayer from the costs of cleaning up these periodic loss events are so captive by the very industry they are charged with regulating that they are entirely ineffective. One of the best ideas yet: as Congress proceeds in its deliberations about “reforming” derivatives markets, the views of the existing financial regulatory agencies, the Federal Reserve Board, and Treasury, should get NO CONSIDERATION since their views are largely verbatim those of JPM, GS, and other large OTC dealers. IT’S TIME FOR THIS SHIITE TO STOP!

To echo KD’s new mantra:

STOP THE LOOTING!
START PROSECUTING!

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