[RatRipper]

If the text highlighted is representative of what they actually did, I think it is good. It permits them to execute a derivatives/ swaps to offset risks already on their books. It is my understanding that the credit risk derivatives, where big banks and insurance companies essentially took the credit risk off the originating lender’s books and put it on their own (for a fee), were the main problem in the big bank/ insurance company failures/ bailouts. In the end, they took more credit risk than they could cover, and of course should have been allowed to fail and not be bailed out. That doesn’t appear to be what this legislation is addressing or permitting again.

Derivatives and swaps for the purpose of reducing risk exposure ALREADY ON A BANK’S BOOKS from ordinary deposit and lending transactions is a good thing for both the bank AND taxpayer . . . IMHO. As posted here, I am perfectly fine with it. But it has to be done correctly. In my regulator days, I saw a case where a bank claimed to be hedging, whereas they were actually “doubling up to catch up”, and that is VERY, VERY bad.

[coloradan]

There are $300 trillion in swaps covered by the bailout, according to Zerohedge. This magnitude of derivatives can't possibly be anything other than extreme speculation, as there isn't that much money in the world. In particular, it isn't merely covering normal bank activities. But even if it is, why should bankers get taxpayer backstops for doing whatever they do? Loggers, painters, electricians, ditch diggers and a thousand other occupations don't get taxpayer backstops for what they normally do. What is special about bankers?

(A: Bankers own both sides of government and use it to fleece the general public for their own enrichment, something loggers and electricians, etc., have not been able to do. This has traditionally been cured with lamp posts, which have gone unused for a little too long at this point.)