[AnotherUnixGeek]

So what do we do now? In 2000, the 106th Congress as its final effort passed the Commodity Futures Modernization Act (CFMA), and, disgracefully, President Clinton signed it. It opened up the bucket-shop loophole that capsized the world's economic system. With the stroke of a presidential pen, a century of valuable protection was lost.

But regulation isn't enough to stop a phenomenon called "de-supervision" that occurs when officials can't, or won't, oversee a market. It's doubtful that any agency can be relied on to control lucrative default swaps, which should be made illegal again. The bucket-shop loophole must be closed. The evil genie should go back in the bottle.

Will Obama re-criminalize these financial weapons by pushing for repeal of the CFMA? This should be a no-brainer for Obama, who, before becoming a community organizer in Chicago, worked on Wall Street, studied derivatives, and by now undoubtedly knows their destructive power.

Fascinating article, which I'm going to have to re-read a few times to fully understand (I'm no economist). But the author fingers a villain and proposes a solution - what do FReepers knowledgeable about this level of economics think?

[Windflier]

Fascinating article, which I'm going to have to re-read a few times to fully understand (I'm no economist).

Same here. I put the article up to get responses from the more financially educated Freepers. They're coming in now.

One of the better responses was the observation that if stocks like McDonald's Corp and Walmart had been packaged like these toxic mortgages, we wouldn't be in an economic crisis at all.

I would have to assume, though, that the reason those blue chip stocks weren't packaged that way, is because of the fact that they were considered safe enough that they didn't have to be "insured" against default or loss.