Darn Good Rant, Uncletumbleweed...I Said to Myself

First, a quick review (if you read fast) of a fine piece from PBS Frontline:
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

Now, we will revisit some historical moments, which you may have missed because America's media was being spoon fed MISDIRECTION! Just like a magic show folks, it was done to US with smoke and mirrors...

PERSONAL FINANCE
Financial reform loophole may hurt consumers (gee, Rex, ya think?)
By Rex Nutting
Last update: 4:19 p.m. EST Nov. 8, 1999Comments: 7
WASHINGTON (CBS.MW) -- The financial modernization bill hasn't even been signed into law yet and already there are accusations that consumers could lose more than $50 billion in a rush to reap the benefits of the bill.
"This structure creates management- dominated boards, whose members will personally reap huge profits through unfettered stock options." Letter to Congress from consumer groups ...
Even the Clinton administration, which strongly supports the bill, admits that a minor provision in the recently passed bill could enrich "insiders at the expense of consumers."
The bill, known as the Gramm-Leach Act, will break down the structural barriers in the financial services industries and allow companies from one sector to offer services in others. Many observers predict a new wave of mergers and acquisitions in the industry, similar to the tie-up between Citigroup and Travelers that created Citigroup...

Rex called the Gramm-Leach-Bliley Financial Modernization Act of 1999 (conceived as S. 900 http://thomas.loc.gov/home/r106query.html ) by another name (we all know a piece of uh, legislation by another name, still smells the same...) and he would have had to be psychic to know that, one year later, the Commodity Futures Modernization Act would be hidden in a piece of...necessary (?) legislation called H.R. 4577,DEPARTMENTS OF LABOR,HEALTH AND HUMAN SERVICES,AND EDUCATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2001 http://thomas.loc.gov/cgi-bin/query/D?r106:13:./temp/~r106tX7kvQ::

Now, from the library of Congress, the naughty banks speak...three months after the passage of FMA of 1999.(Actually they phoned it in...wishing to be ad hoc, I guess)
TESTIMONY of a COALITION of INVESTMENT AND COMMERCIAL BANKS
(Regarding) THE REPORT OF THE PRESIDENT'S WORKING GROUP ON FINANCIAL MARKETS
(Entitled) OVER-THE-COUNTER DERIVATIVES MARKETS AND THE COMMODITY EXCHANGE ACT
(before the) COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY
(of the)UNITED STATES SENATE, FEBRUARY 10, 2000
Chairman Lugar, members of the Committee, this testimony is submitted by Edward Rosen, a partner with Cleary, Gottlieb, Steen & Hamilton, on behalf of an ad hoc (Encarta Dictionary: ad hoc; adj;, done or set up solely in response to a specific situation or problem, without considering wider or longer-term issues...Thesaurus; English; US; unplanned, informal, impromptu, improvised, off the cuff, unprepared, extemporized, makeshift...do you see a pattern here?...uncletumbleweed)... coalition of investment and commercial banks (the "Coalition"). The Coalition is comprised of the following institutions:

(Hey, aren't these the banks that imploded because of this legislation being passed?...uncletumbleweed)

The Chase Manhattan Bank
Citigroup Inc.
Credit Suisse First Boston Inc.
Goldman, Sachs & Co.
Merrill Lynch & Co., Inc.
Morgan Stanley Dean Witter & Co.

"This Coalition is grateful for the opportunity to present the Committee with the Coalition's views regarding the report of the President's Working Group on Financial Markets (the "Working Group") entitled Over-the-Counter Derivatives Markets and the Commodity Exchange Act (the "Report"). The Coalition supports the recommendations set forth in the Report and urges the Committee to incorporate the Report's recommendations in legislation during this session..." (We have no idea how grateful they actually were, but based on the $300M spent lobbying for the FMA of 1999, "grateful" must have really impressed Congress...uncletumbleweed)

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On August 25,2000 the committee gave its recommendation:

Calendar No. 766, 106TH CONGRESS, Report, SENATE, 2d Session, 106-390
The Committee on Agriculture, Nutrition, and Forestry, having considered an original bill to reauthorize and amend the Commodity Exchange Act to promote legal certainty, enhance competition, and reduce systemic risk in markets for futures and over-the-counter derivatives; and for other purposes, reports favorably thereon and recommends that the bill do pass....
.... ADOPTION OF PRESIDENT'S WORKING GROUP REPORT
This legislation adopts many of the recommendations of the PWG report. The bill contains several mechanisms for ensuring that legal certainty is attained and that certain transactions remain outside the CEA. The electronic trading facility exclusion would exclude transactions in certain financial and other intangible commodities from the Act if conducted: (1) on a principal to principal basis; (2) between institutions or persons with high net worth; and (3) on an electronic trading facility. A second exclusion would exclude certain transactions from the CEA if (1) conducted between institutions or persons with high net worth; and (2) not traded on a trading facility. A third exclusion confirms and clarifies the Treasury Amendment language already contained in the CEA by excluding all transactions in foreign currency and government securities from the Act unless those transactions are futures contracts and traded on an organized exchange. As recommended by the Working Group, the bill would clarify the CFTC's jurisdiction over off-exchange retail futures transactions in foreign currency that are not effected with a regulated entity. A fourth exclusion for hybrid securities and depository instruments clarifies circumstances under which structured securities and depository instruments with embedded futures- and commodity option-like payments are excluded from regulations under the CEA. Another important recommendation of the PWG was to authorize clearing organizations, including futures clearinghouses, to clear OTC derivatives in an effort to lessen systemic risk. (4 exclusions that gave the thumbs up for the race to here and now to begin... and the winner loses all, just like in the song)

Here is the suspenseful part, folks. Will anyone actually read this legislation before they pass it?

[House Reports: 106-645; Latest Conference Report: 106-1033 (in Congressional Record H12100-12439)
Note: H.R. 4577, the Consolidated Appropriations Act 2001, incorporated in its conference report the provisions of several bills by reference. This included H.R. 5656 - Labor HHS Education Appropriations; H.R. 5657 - Legislative Branch Appropriations; H.R. 5658 - Treasury Appropriations; H.R. 5666 - Miscellaneous Appropriations - except section 123 relating to the enactment of H.R. 4904; H.R. 5660 - Commodity Futures Modernization; H.R. 5661 - Medicare, Medicaid and SCHIP Benefits Improvement and Protection; H.R. 5662 - Community Renewal Tax Relief and Medical Savings Accounts; H.R. 5663 - New Markets Venture Capital Program; and H.R. 5667 - Small Business Reauthorization.]
12/15/2000 6:38pm: On agreeing to the conference report Agreed to by the Yeas and Nays: 292 - 60 (Roll no. 603).
12/15/2000: Senate agreed to conference report by Unanimous Consent. (consideration: CR S11855-11885)
12/21/2000: Signed by President. (William Jefferson Clinton...This legislation received almost no recognition in the media because they were distracted by his impeachment proceedings. Pure misdirection in order to get this legislation through, under the radar.)
12/21/2000: Became Public Law No: 106-554.
(57 members of the House ABSTAINED FROM VOTING! Are THEY the representatives who read this before the roll call?)

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But Citi and the others didn't wait for that to happen. They were busy setting up deals that would benefit greatly...if CFMA of 2000 (with its exemptions and exclusions) passed. How did they know...?

MUTUAL UNDERSTANDING
Citigroup teams with State Street
By CBS.MarketWatch.com
Last update: 1:56 p.m. EST Dec. 8, 1999
"NEW YORK (CBS.MW) -- Citigroup -- the world's largest financial services company -- is teaming up with State Street to boost its sales of retirement plans. The joint venture, which will be called CitiStreet, is viewed as an effort by the two companies to take on 401(K) kingpin, Fidelity.
The venture will be a 50/50 partnership, which is expected to generate more than $300 million in revenues next year. State Street's Global Advisors arm is contributing its 401(K) business and benefits administration business, while Citigroup..."(... pays bonus after bonus after bonus for losing YOUR money, America!...uncletumbleweed)

SEC FILINGS
Citigroup chair files to sell $58 million in stock
By CBS.MarketWatch.com
Last update: 6:03 p.m. EST Dec. 14, 1999
WASHINGTON (CBS.MW) - "Citigroup Chairman Sanford Weil filed to sell 1.1 million shares of the company's stock, valued at $58.3 million, according to a Securities and Exchange Commission filing released Monday.
Weil, who also serves as the company's (C: Citigroup Inc) co-CEO, registered to sell the shares between Dec. 8, 1999 and March 8, 2000 through Citigroup brokerage unit Salomon Smith Barney. SEC Form 144 shows a filer's intent to sell shares. Actual verification of sales, when they occur, are required in later filings.
Representatives of the New York-based financial services firm did not immediately return calls for comment. There are an estimated 3.3 billion shares of Citigroup outstanding. The stock fell 1 13/16 to 53 1/2 on Tuesday." (How the mighty hath fallen...or is it more like "Take the money and run?")

The danger presented by the ad hoc coalition with delusions (not a typo) of grandeur, is extremely dangerous to the freedom of workin' class folks whose labors enable the "system" to function.

Please, send a "get off the pot" message to Congress.
http://www.usa.gov/Contact/Elected.shtml
I believe the "wake-up" call has been delivered. Then again...