According to what I read in this NY Times article, this week, “the Senate voted down a proposal to bar the so-called naked buying of credit-default swaps.”

This, of course, is comical, and sad, since as is now well known the entire financial crisis was caused synthetic CDO’s and naked default swaps, which allowed banks to create trillions in synthetic liabilities that far, far exceeded any real underlying mortgage liabilities that existed in the financial system. When push came to shove, nobody of course, was willing to pony up the money for these fraudulent synthetic securities, necessitating all sorts of bailouts from the government.

Common sense would indicate that banning naked CDS, which serve no purpose, and in actuality greatly increases (as has been proven ad infinitum) financial risk in the economy, would be the first thing to ban in any financial regulation bill. In fact, there is really little else that needs to be done to create a more stable financial system. Amazingly, Germany remains the only country with the common sense to ban naked CDS. Presumably, they are the only country that has not been taken over by the financial oligarchy.