The Growing Police State: JPMC Edition pt. II

Yesterday, the Chairman of the SEC, Mary Schapiro, testified before the US Senate Committee on Banking, Housing, and Urban Affairs.  I linked to a transcript of her testimony yesterday.  After reading through it, I find myself just shaking my head.  Go read the whole thing, but keep this in mind: All of her testimony is only because of Dodd-Frank, and the chaos it has created in the financial sector.

Done?  Okay.

Here are some things that jumped out at me:

The Dodd-Frank Act also specifically requires that the Commission, the CFTC, and the prudential regulators “consult and coordinate with foreign regulatory authorities on the establishment of consistent international standards” with respect to the regulation of OTC derivatives.

Read that again.  Dodd-Frank specifically requires that the SEC and CFTC "consult and coordinate with foreign regulatory authorities..." that is, it requires US officials to take into consideration foreign law.  So there can be no escape- not from us, nor from any other government.  If you want to find some way to avoid over-burdensome regulation, you're screwed.  Either that other government will find you and screw you over, or the US Government will.

Rather than deal with the international implications of Title VII piecemeal, we intend to address the relevant issues holistically in a single proposal.

This is something legislators (and regulators) love to do.  They claim it's to make things easier.  She goes on to say that doing this is specifically so that people don't have to look in multiple places for all the rules.  But that only matters if the rules are intra-referential, redundant, and/or contradictory.  If the rules each pertained only to the area they were supposed to, and if they were not some "flying spaghetti monster" of regulation, having the rules each broken up into their own documents would not cause a problem.  However, they will be intra-referential, redundant, and contradictory (yes- all of those).  So, by including them all in one "mega-rule" they actually make it harder to interpret, and therefore comply with, the rules once finalized. 

This isn't about secure trading- it's about compliance with the Police State.

We followed the statutory language to bring dealers acting above a de minimis level under the Commission’s direct oversight, and in so doing we have ensured that the vast majority of notional dealing activity in this market will be subjected to the SEC’s Title VII dealer regulatory regime.

Just a quick note here.  Read it again, "...we have ensured that the vast majority of notional dealing activity in this market will be subjected to the SEC's Title VII dealer regulatory regime."  So they're doing everything they can to make sure very dollar traded is covered by their "rules" and "regulations," which, per the point earlier, is not about secure trading, but the Police State.

Again, I recommend you read the whole thing.  When you consider how much authority the Legislature ceded to this unelected, largely unaccountable bureaucracy, and the authority they wield, it is just astounding.