Paulson Has Your Back (but prolly not)

The New York Times reports some new initiatives being proposed by the Treasury Department that have no chance of becoming law before the election, so it almost behooves us to ignore the key points and make something up. It's all unquestionably mooty.

The proposal includes three new regulatory entities:

• A mock organization, or rather, a Mortgage Origination Commission (MOC), to look over the shoulder of the states in their regulation of mortgage brokers, and oversee licensing. A secondary task will be to collaborate with a fine teaching institution like Devry to start a series of mortgage education classes for new home buyers. The required courses will include, "Debt is Not A Figment of Your Lender's Imagination," "Your Income is a Real Number" and "Gravitational Pull and Mean Reversion in Home Pricing (an upper level course)"




• A national insurance regulator to harmonize the current state structure. Smokey the Bear is set to shift from his current forest work to head the new organization, after certain other able folks(apes and geckos) turned down the largely figurative position.




• A Prudential Financial Regulator to combine the supervision of banks and thrifts, and make sure that loans are given to people who are 1) citizens 2) have employment income 3) believe in paying loans back 4) can read 5) understand addition and subtraction 6) know what interest is and 7) can spell variable rate, exploding rate, and reset.



In additon to these steps, the Securities and Exchange Commission and the Commodity Futures Trading Commission would be combined. A backup doomsday style fund would be created in a remote area of Alaska that would build up a complex portfolio of futures, options and various other derivatives balanced to explode in value with any fall in the stock markets, rendering lapses in regulatory enforcement less disastrous.

The Federal reserve would have greater opportunity to review the books of firms across the financial spectrum (from hedge funds to commodity trading exchanges) or any organization posing a threat to American stability. This expanded capability will be handled with care, with instructions to avoid harassing KFC employees during inspections.

But again, this is an election year, so none of this this is likely to matter any time soon. Of course the Democrats, while cautiously receptive to parts of the proposal, are likely to want to be more aggressive in separating Americans from the effects of self induced eve of destruction financial moments.

It would seem that nobody is looking at a long string of actions dating back to the 1990's that have resulted in us being where we are today; our little inflate, boom, bubble, bust, inflate cycle being totally incomprehensible to those who want to be up at 3am on the phone, saving the country.

"Smokey, this is Hillary. Yes. The Vice President. Me and Obama are worried. And hungry. Can you contact Bernanke at the Fed and send them down to KFC to check the books, and have them bring us back a couple of six piece meals. All white meat. What? Yes. They are open 24 hours".