Geithner's derivative gabfest

The fox now wants to guard the henhouse, even though the Government was "blindsided" by derivatives, so intones Turbo Timmy, who at 9:00 am today, will spin his new plans in the hallowed halls of Congress.

What we already know, is that derivatives are a major profit center for Wall Street firms, and that the lobbyists have invaded Washington, hoping to stop regulation.

Disclosure filing forms show that even 42 non financial companies and trade associations are lobbying Congress on derivatives.

What are these companies afraid of? How about this:

The administration's proposal calls for all "standard" derivative contracts to be cleared through a central body and traded on an exchange or equivalent electronic platform.

The clearinghouse would require daily pricing of the assets, which could require companies to post additional collateral, in the form of cash or short-term securities. Customized contracts would be permitted, but the proposal would require higher levels of capital to secure against risks.

And I suppose they are also afraid of getting rid of a contract that allows both parties to simultaneously book a profit. Who says Wall Street is a zero sum gain? That's only when the derivative settles!

The Congressional gabfest starts in 90 minutes.

And we'll all wait with bated breath, for the "all show and no go" hearing!