The CFTC’s Bart Chilton was on CNBC this morning discussing a warning letter he sent to Ben Bernanke yesterday regarding the Volcker Rule and Chilton’s concerns that the large banks (ie Morgan and Goldman) will attempt to find and use every loophole they can to get against the prop trading restrictions contained in the Volcker rule.

I’m okay if they hedge their risks. But there’s a thin line between hedging and speculating. So you manage your risks, if that over time, if that hedging of your risk continues to result in large profits like you’re making a lot more money than the risks that you’re losing, then you have to say there’s a presumption that they’re willful and trying to be evasive.  We do need to make sure that they can hedge their business risks. It’s just not going crazy and going out and betting against their customers like we’ve seen where they set up these fake info where they populate the funds with their own customers and then take the opposite position to their own customers.

CNBC’s response?  We should let the Fed regulate these bank’s compliance with the Volcker rule!  

Chilton’s full interview below:

  1. Oyez, Oyez, Oyez, all rise to honor HRH Lord Bart Chilton; he of the important hair.  Listen all ye peasants, he is about to speak.
    If  Adam’s life  in the Garden of Eden was equivalent to Bart Chilton’s effectiveness in challenging the Cartel, Adam would still be sitting by the water’s edge,  Eveless,  gazing at his reflection and playing with himself. 
    Come to think of it I’m guessing that how Bart spend his time too. 

    • “gazing at his reflection and playing with himself.  Come to think of it I’m guessing that how Bart spend his time too. ”

      Don’t know about his private proclivities but that sure seems to be what he does on the job!  🙁


  2. Something that we should consider is… how did we survive doing business back in the days when people did not hedge everything in sight?  Could it be that they HAD to be VERY careful about how they invested and managed those investments?  Bet your bippy!  Now, they just throw more hedges at basically bad ideas and call them good.  🙁

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