via Obama Plans Fast Action to Tighten Financial Rules – NYTimes.com.
By STEPHEN LABATON
Published: January 24, 2009
WASHINGTON — The Obama administration plans to move quickly to tighten the nation’s financial regulatory system.
Paul A. Volcker
Officials say they will make wide-ranging changes, including stricter federal rules for hedge funds, credit rating agencies and mortgage brokers, and greater oversight of the complex financial instruments that contributed to the economic crisis.
Broad new outlines of the administration’s agenda have begun to emerge in recent interviews with officials, in confirmation proceedings of senior appointees and in a recent report by an international committee led by Paul A. Volcker, a senior member of President Obama’s economic team.
I wouldn’t know what “derivatives like credit default swaps” were if I were pissing on one of them, likewise for a “hedge fund“. But I do know that the Bush flunkies fucked this up so bad that anything done to put it right should be met with a hallelujah chorus or two.
I especially loved the part about more control over the credit reporting agencies. It seems that companies could purchase credit ratings.
The core problem, they said, is that the agencies are paid by companies to help them structure financial instruments, which the agencies then grade.
“Until we deal with the compensation model, we’re not going to deal with the conflict of interest, and people are not going to have confidence that the ratings are worth relying on, worth the paper they’re printed on,” Mary L. Schapiro said in testimony earlier this month before being confirmed by the Senate to head the Securities and Exchange Commission.
It says here that the agencies are paid by companies to help them…cheat! I had no idea that you could buy a credit rating! Hey Equifax, how much for an 800? I’ll put it on my credit card, he he.
Follow me on Twitter!
