Grandiose Double Dipping Flip Flap

-By Vince Johnson

What percentage of the U.S. population understands the language used by those assigned to the task of getting our economy back on course? Take this quick test and you’ll see what I’m driving at:

Q: What does “PWG” stand for? A: President’s Working Group on Financial Markets.  
Q: When was the “PWG” established? A: Undetermined. Best guess is “recently”.  
Q: What authority does the “PWG” have? A: Undetermined.  
Q: What is an “Initiative to strengthen OTC Derivatives Oversight and Infrastructure”? A: Huh? Duh!  
Q: What is a “Credit Default Swap Central Counterparty”? A: Grandiose double-dipping-flip-flap if I ever heard it.

The above questions are based upon a News Released issued by the U.S. Department of Treasury on November 14, 2008. The first three paragraphs are quoted below. If you want the full text let me know and I’ll send it. You can also get to it using Google with key words “U.S. Department of Treasury News Releases”.

November 14, 2008
HP-1272 U.S. Department of Treasury  
PWG Announces Initiatives to Strengthen OTC Derivatives Oversight and Infrastructure

Washington- The President’s Working Group on Financial Markets today announced a series of initiatives to strengthen oversight and the infrastructure of the over-the-counter derivatives market.

Initiatives announced today include the development of credit default swap central counterparties, some of which will commence operations before the end of 2008, and the establishment of a Memorandum of Understanding regarding *CDS central counterparties among the Federal Reserve Board of Governors, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The PWG also announced a broad set of policy objectives to guide efforts to address the full range of challenges associated with OTC derivatives and issued a progress summary to provide an overview of the results of ongoing efforts to strengthen the infrastructure of OTC derivatives markets.

The Treasury Secretary serves as chair of the group, which includes the Chairs of the Federal Reserve Board, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. The PWG, working with the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York, has been actively overseeing improvements underway in OTC derivatives markets and the reports issued today identify the progress already made and specific objectives for the relevant supervisors going forward.

After a few more paragraphs of similar gibberish the release concludes with this enlightening disclosure:

The PWG has established the following policy objectives:

  1. Improve the transparency and integrity of the credit default swaps market.
  2. Enhance risk management of OTC derivatives.
  3. Further strengthen the OTC derivatives market infrastructure.

Strengthen cooperation among regulatory authorities.

One last question:

Can you find a reasonable soul anywhere on earth that believes that double talk like this will put America back on the track to prosperity and the pursuit of happiness?

*CDS – Credit Default Swap

(Photo credit: New York Daily News)

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Vince Johnson welcomes comments. Please send them to,Vince Johnson(vjadtrak@wvi.com)
See Vince in the new book Americans on Politics. Policy, and Pop-Culture.

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