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To: snowsislander
this analysis by Mr. de Soto is way off base. We must not destroy our ability to freely make financial contracts, and that's exactly what we are talking about when we talk about outlawing over the counter derivative contracts. Nor do I hold much brief for calls for "transparency": I don't think that every financial contract needs to be publicly recorded and publicly negotiated.

It is a general principle of common law that a contract has to be for a lawful purpose. A set of contracts whose purpose or whose result is to destabilize the currency or the economy is not a lawful enterprise and the Congress is well within its powers to outlaw it. If you think the purpose of these is not to destabilize the economy then you need to go and read the checkered history of Michael Milkin who purposely created the junk bond market with the explicit understanding that the systemic risk that was created would be passed on to the public through the offices of the Federal Reserve who would face the Hobson's choice of bailing out the banks and socializing the losses or else allowing the economy to tank. In other words they held a gun to the head of the US economy and said pay up!

17 posted on 12/13/2009 10:38:39 AM PST by AndyJackson
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To: AndyJackson

Michael Milken with his junk bonds was like Mother Teresa compared to what Wall Street pond scum have done with derivatives, credit default swaps, and other swaps


20 posted on 12/13/2009 12:46:10 PM PST by dennisw
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