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Regulation need for credit default swaps; Alfonso Saahir; Beaver County Times; January 19, 2012.
In two previous letters [“Look to the Constitution,” 2/27/05; “Muslims are obligated to pray,” 12/1/06 (I didn’t critique them.)] from Mr. Saahir, he appeared to believe American Muslims weren’t being treated fairly. I would have included links to the letters, but the Times changed its website and material published before late-August 2009 is no longer available.
In the first letter, Mr. Saahir asked, “Is there any case history where American Muslims have committed any ‘terrorist’ attacks against the U.S. government?” Bad question, Mr. Saahir. In the days before the 2003 invasion of Iraq, Army Sgt. Hasan Akbar murdered two officers at Camp Pennsylvania in Kuwait and wounded 14 other soldiers, the result of his gunfire and throwing hand grenades into a tent where the soldiers were sleeping. In his diary before the murders, Mr. Akbar wrote, “I may not have killed any Muslims, but being in the Army is the same thing. I may have to make a choice very soon on who to kill.” Mr. Akbar was found guilty and sentenced to death. It happened again on November 5, 2009, at Fort Hood, TX. We also need to remember Islamist attacks thwarted over the last several years, like the planned attack on Fort Dix, NJ, in 2007 by the “Fort Dix Six.”
The most recent previous Saahir letter I critiqued was “The real job killers.” Other letters from Mr. Saahir are here, here, here, and here.
Below is a detailed critique of the subject letter.
“The coporate executives tool that played a big role in creating our economic tsunami is known as Credit Default Swaps (CDS). This has tainted the reputation of many well-known and respected economists, executives and market analysts of the financial industy [sic].
“Credit Default Swaps are insurance-like contracts that promise to cover losses on certain securities in the event of a default. Even though they are actually insurance contracts, they are not recognized as that because if they were they would have to be regulated. The company issuing the contract would have to report them to goverment [sic] regulation agencies and also would be required to set aside funds to cover potential claims.
“But by calling them ‘swaps’ they do not fall under these regulations. No one knows exactly how many of these contracts are out there or the extent of their obligations. It is known that there is an inability of them to be fulfilled. The 1999 laws that reduced regulations seperating [sic] banking,insurance and brokerage activities and also those rewriting securities laws to make investors lawsuits harder to file has help to create this economic tsunami.”
[RWC] Mr. Saahir can write all he wants about CDSs, but leftist policies and government-sponsored entities (Fannie Mae and Freddie Mac) are/were at the core of our current mess.
“Voluntary regulations [sic] does not work in the self-correcting powers of the free market. Proper climate will create growth. We cannot legislate ethics.”
[RWC] I don’t get this paragraph. It starts apparently advocating more regulation and then appears to claim more regulation won’t work by asserting “We cannot legislate ethics.”
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