New finance rules

Today the Obama Administration unveils their new financial plans. Not just content to attach strings after the fact to billions they've handed out freely, Tim Geithner and the other three people working at the Treasury Department have decided to come up with a plan to address new regulation of the financial markets to help better avoid a future financial Ragnarok. The sooner the better as the canvas bubble fueled by the tent cities springing up around the US will threaten the economy in 2011.

The plan, which would require Congressional approval, would give the government vast new powers over “systemically important” banks and other financial institutions that are so big that their collapse would jeopardize the economy as a whole.
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If regulators decided that a company had become “too big to fail,” as was the case with A.I.G. in September, they would subject it to much stricter capital requirements than smaller rivals and much closer scrutiny of its borrowing levels and its trading partners, or counterparties.

But the most striking new proposals, and the ones that may provoke the most heated opposition from the industry, would regulate so-called private pools of capital — hedge funds, private equity funds and venture capital funds — and the gigantic market in financial derivatives, including instruments like credit-default swaps, the insurancelike instruments that allow investors to hedge against bond defaults.

Of course this has to pass Congress, so there's a 50/50 chance that Harry Reid will have to water the bill down to the point where it actually deregulates the markets further just to get Arlen Specter to deign to consider voting for it. Not included in the article was a list of other regulatory measures the bill wishes to take:

• A company may only engage in enough shady dealings to tank 1/3 of the world economy
• The bonus system will be completely overhaul...just kidding
• All senior management must take at least one class on faking sincerity and gratitude
• ABC will commission the program Extreme Makeover: Corporate Office Edition so as to provide reasonable cover for those corporations still wishing to redecorate during their own collapse
• Failing companies will only be allowed to have one sports sponsorship at a time and will have to choose between jersey sponsorship and stadium sponsorship
• When choosing a minority underclass that tricked your company into your economic ruin, all official spokespeople will be allowed only to blame that one group for the duration of the crisis
• Only 2 handjobs per day for executives at their office spa
• Horse and dog track betting are now considered legal financial instruments for securities and credit default swaps
• Monocles, spats, top hats, and canes are mandatory attire for any CEO accepting government bailout funds
• Senior management must legally pinky swear to never break the economy again