Finally Agree with Geithner on Regulations Needed

I was pleased to read on Bloomberg today that Mr. Geithner has a plan to regulate over-the-counter derivatives. This is so overdue and I have been frustrated for 3 years by various leaders in Washington do anything about this market even though it was largely responsible for the collapse of the global economy.

Not only was it largely responsible for the collapse but very dangerous precedents are being set as I write this where these exotic financial products are being used as a gauge to price debt.

These contracts represent a $684 trillion over-the-counter derivatives market and they are now typically conducted over the phone between banks and customers!

What an absolute trip. I know with the "trillion" word being passed around like water lately another "trillion" figure may not sink in but Think about this number for a moment. What is the US debt, $10 Trillion? We are talking $684 trillion here. Yes, yes many of you will say, "So what." there are trillions of dollars in "derivatives" out there on every other product, commodity, stock etc. traded every day. Yes, "traded" on "open markets" with clear pricing and risks born by those who trade them and these types of "products" are not "insuring" against default of debt.

I was so incensed when I heard a clip by Lloyd Blankfein where he made this point with a straight face. The guy is a raving lunatic in my book to be able to do so. He is a "Hitler" of finance. There is no question. Some may call him a genius but he defends destruction and annihilation of all around him from a financial perspective and as I have said a million times and will continue to say, with 6 billion people on the planet all more interconnected every day, guys like Blankfein and the businesses they run no longer serve any benefit to humanity, on the contrary, they are destructive to humanity, our "capital system" and serve no allegiance to any good on the planet other than to do whatever is necessary to return 30% plus to their investors irrespective to the damage they cause economies and individuals and they operate without rules governed by any sovereign state, territory or jurisdiction (except for the strings now on his firm after taking money from the government and borrowing to feed his machine with the backing of the FDIC).

So some reasoning has entered Washington and they seem to understand the importance of regulating these derivative products. Now what about the unregulated pools of global money driving this, Hedge Funds?