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Join date : 2009-10-25

PostSubject: Discarding Insiders   Tue 20 Apr 2010, 5:04 pm

We're now at the stage where key insiders ('threats') are being discarded and disposed of, as their usefulness is now outweighed by their threat-risk. And definitely see the end of the article, where Clinton sets-up the scenario of violent response to social-dislocation.

Clinton Calls Advice He Got on Derivatives ‘Wrong’

April 19, 2010 (Bloomberg) -- Former President Bill Clinton said his Treasury Secretaries Robert Rubin and Lawrence Summers were wrong in the advice they gave him about regulating derivatives when he was in office.

“I think they were wrong and I think I was wrong to take” their advice, Clinton said in an interview on ABC’s “This Week” program broadcast yesterday.

Their argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people will buy them and they don’t need any extra protection,” Clinton said. “The flaw in that argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”

“Even if less than 1 percent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect 100 percent of the investments,” Clinton said.

Today, Douglas Band, a counselor to Clinton, clarified the former president’s comments in a statement.

“Reflecting on a derivatives debate that occurred 12 years ago, President Clinton inadvertently conflated an analysis he received on a specific derivatives proposal with Chairman Greenspan’s arguments against any regulation of derivatives,” the statement said.

Obama Package

Tighter regulation of derivatives trading is part of a package of financial reforms being pushed by the Obama administration against Republican opposition. The Senate is debating a bill introduced by Banking Committee Chairman Christopher Dodd that would also give the federal government the authority to unravel institutions whose failure threatens the financial system.

In the interview, Clinton also said the Bush administration contributed to the financial crisis with lax regulation.

“I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go,” Clinton said. If Clinton’s head of the Securities and Exchange Commission, Arthur Levitt, had remained in that job, “an enormous percentage of what we’ve been through in the last eight or nine years would not have happened,” Clinton said.

‘Vigorous Oversight’

“I feel very strongly about it,” Clinton said. “I think it’s important to have vigorous oversight.”

Summers, director of Obama’s National Economic Council, said in a Bloomberg Television interview last week that the Obama administration supports “the principles that derivatives need to be traded in the sunshine, that there needs to be centralized clearing.”

In April 8 testimony before the Financial Crisis Inquiry Commission, Rubin said “derivatives should be subject to collateral and margin requirements, standardized derivatives should be exchange traded, and customized derivatives should have a clearinghouse or, at least, greater disclosure requirements.”

Clinton also said that Republicans who controlled Congress would have stopped him from trying to regulate derivatives. “I wish I had been caught trying,” Clinton said. “I mean, that was a mistake I made.”

Clinton said Republicans will fall short of retaking Congressional majorities in the 2010 election.

‘Less Dramatic’

“I think the outcome is likely to be far less dramatic than it was in ‘94,” Clinton said. In the 1994 election, after Clinton’s second year as president, the Republicans captured majorities in the House and Senate. “If history is any guide they should make a few gains, but I -- I don’t expect them to win in either house.”

Clinton said that Obama should appoint a progressive to the Supreme Court. “Because Justice Stevens was part of the four-person progressive block, he will of course nominate someone who will be part of that,” Clinton said, referring to retiring Justice

Clinton, 63, said both he and his wife, Secretary of State Hillary Clinton, 62, are too old to be a good choice for the court, and that the president should pick someone 10 or 15 years younger. He also suggested considering candidates who don’t have judicial backgrounds.

Best Judges

“Have we gone too far in this process that assuming only judges can be elected? That somehow you’re not qualified if you weren’t a judge.” Clinton said. “Some of the best justices in the Supreme Court in history have been nonjudges.”

Clinton also said that as he began preparing for the anniversary of the 1995 bombing of a federal office building in Oklahoma City, he saw “a lot of parallels” between the early 1990s and today.

“Both the feeling of economic dislocation and the level of uncertainty people felt,” Clinton said. “The rise of kind of identity politics. The rise of the militia movements and the right-wing talk radio.”

“A lot of the things that have been said create a climate in which people who are vulnerable to violence -- because they are disoriented like Timothy McVeigh was -- are more likely to act,” Clinton said.

McVeigh, a former U.S. Army member, on April 19, 1995, detonated a truck bomb outside the Alfred P. Murrah federal building in Oklahoma City, killing 168 people. McVeigh was executed in 2001.

“We all have to be careful,” Clinton said. “We ought to remember after Oklahoma City.”
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