First, I think you are arguing against my position again, not Zerohedge’s. Second, I think you might be might be misunderstanding my position. I never said that all swaps or derivatives were bad (and, should be prohibited). I support voluntary contracts between consenting adults. However, I don’t think taxpayers should be on the hook for any of them. I will concede that not *all* such things are speculative, but if there are $300 trillion, or rather, $1 quadrillion, notional, of such contracts out there, by far the overwhelming majority *must* be speculative, because there isn’t enough underlying economic productivity to support that much notional in legitimate hedging activity. I agree with you that AIG should have been allowed to fail, and for that matter Fannie and Freddie too. I am concerned that the present bill, if passed, will set up the situation for a much larger repeat of the TARP in 2008.
Very well stated.
And I agree with virtually everything you said. But to reiterate for the third time, the law as posted in the article deals primarily with HEDGING TRANSACTIONS or transactions that do not accumulate risk.