Sunday April 17, 2011
I am reading Robert Scheer's The Great American Stickup. Recently I gave the lecture on the history of derivatives as well as the recent history of the financial crisis as well as famous derivative blow ups. Sheer pulls not party line punches, describing vividly how Enron et all bought an paid for stalwarts in both parties to do their bidding. As I have said this sort of background reading will allow you to understand more about derivatives, how they came to be, how de regulation of Glass Stegall by Texan Phil Gramm no less, made all this happen. Consider this e mail from one Enron lobbyist to another. The comments in parentheses are mine.
Treasury just minutes ago sent this compromise language to the CEA Commodity Exchange Act to Gramm's staff. It is my understanding from Treasury that the swap exemption is expanded slightly to say that if you (that would be Enron) are trading on a facility MTF and you are trading on principle to principle basis (you dreamed up the trade all on your own) among eligible contract participants, you are no longer subject to anti fraud and anti maniuplation as contained in Sec 107 of the House passed legislation. This would be good for us (no kidding!) Ken Lay is in London so we can take a quick look at the attached language and tell me if you concur. Also we need to take a look at the new Sec 4 to see if it causes any problems. They may cut a deal as early as this afternoon!
This students is an example of the best politicians money can buy
Treasury run by Robert Rubin who would later get a multi million job at Citicorp also created by such chicanery
Wendy Gramm former Commodity Futures Trading Commission Chair who moved to the Enron Board
Phil Gramm R from Texas who sponsored the CFMA Commodity Futures and Modernization Act without which we would not have banks in the gambling business
Come back, I'm not thru with the book more to follow
Professor Elam 
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