“On one side of the National Mall in Washington DC the Senate held a confirmation hearing on three Commodity Futures Trading Commission nominees, while on the other side the House of Representatives appropriations committee heard yet another desperate plea from the acting CFTC commissioner for additional funding.  It’s hard to determine which hearing was the more significant to the future of the regulator and the US economy.”

“The CFTC is the regulator of previously unregulated over-the-counter traded derivatives contracts that were at the center of the 2008 economic collapse.  Since the 2008 collapse these derivative contracts, held mainly by Wall Street firms who operate with the benefit of a government systemic risk guarantee, have only grown in size, now estimated at $400 to $600 trillion in notional value.  The world economy is valued at just over $70 trillion, and thus another 2008 style derivatives collapse could destroy the world economy several times over.”

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Read full Valuewalk article here.