Thursday, March 17, 2011

a derivative piece

"...now the way Congressman Blankfein explained it, the Dodd-Frank Wall Street Destruction Act's requirement that OTC derivatives be moved onto Swap Execution Facilities would be a fee bonanza for the trading houses but that money would be lost profit for the corporations themselves. Have I stated that correctly, Mister Blankfein?"
 
"Perfectly, Boehner."
 
"Good, good, these things are really complicated and I want to make sure I have my facts right. Now, that's why, uh... and that would be a bad thing, right? The lost profits?"
 
"Very bad, Boehner."
 
"So you see, uh, the requirement for OTC derivatives to be more formally traded is likely to result in a proliferation of, uh, SEFs, as many as 40, the CFTC thinks."
 
"You don't have any idea what you're talking about, do you Boehner?"
 
"Not now, Eric. You're going to make me lose my train of thought."
 
"That train has already jumped the track, Boehner."
 
"Heh, heh, the Majority Leader is making a little joke... At my expense as usual. The bottom line is that the rule could fragment trading and reduce liquidity, which, uh, is bad, and that's why the House Majority is prepared to fully support Congressman Blankfein's legislation to roll back the..."
 
"Hold it right there, Boehner. One major problem, as I see it, is the fact that Lloyd Balnkfein is not a US congressman and therefore he is not entitled to introduce legislation."
 
"Barney Frank, what are you... That's uh, ridiculous. Of course he's a congressman. Aren't you, Mister Blankfein?"
 
"Indeed I am, Boehner."
 
"Oh yeah? What district?"
 
"No need to be rude, Mister Frank. I am the esteemed congressman from Goldman Sachs."
 
"Bogus. You're going to have to introduce the bill yourself, Boehner, and if you're going to introduce it, you better be able to explain it and it's repercussions."
 
"Come on, Barney, Boehner is our Speaker and you should give him the same sort of respect that the Republicans gave to Nancy Pelosi. Mister Blankfein is well versed on the issue and it's impact on the business community, which is why we asked him to help us draft this bill. Of course Boehner doesn't understand derivatives. The truth is, none of us really do, and we shouldn't be regulating something that we don't understand."
 
"Good point, Eric."
 
"I understand derivatives, Cantor. That's why I put the damn rule into the Wall Street Reform bill."
 
"Oh sure, and now we're supposed to just take the word of Barney Frank, huh?"
 
"Snappy comeback, Boehner."
 
"Uh, thank you, Eric. I think. Now this will be our first step towards repealing the odious Dodd-Frank Wall Street Destruction Act - no offense intended, Barney - and I hope that in the days ahead we can reach a bipartisan consensus to keep our noses out of places where our noses don't belong, and uh... thank you all for coming."
 
"Dismissed, Boehner."
 
"Yes sir, Mister Blankfein."

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