Comments on: Enron was just the beginning

By: Hedging the price of gas, courtesy of the Gramms « Kauli Flower

Hedging the price of gas, courtesy of the Gramms « Kauli Flower — Tue, 22 Jul 2008 08:21:20 +0000

[...] still are. I’m oversimplifying here, but the high prices that we’re paying at the pump? Go back to Enron was just the beginning. The deregulation of the banking industry – the Gramm sponsored Commodities Futures Trading [...]

By: kauli

kauli — Fri, 18 Jul 2008 20:30:33 +0000

Jim, thanks for the clarification on Wendy Gramm’s end date.

I hope you come back because I have a question for you. Admittedly, I am a novice at financial matters other than my own paltry checking and savings accounts. That being the case, am I understanding correctly that this exemption of hybrid instruments was a huge benefit to Enron in their selective accounting practices and financial reportings?

By: Jim Lammle

Jim Lammle — Fri, 18 Jul 2008 18:40:52 +0000

Your point is well taken about Mrs. Gramm, but she did not serve for long during the Clinton administration. She resigned on 1/22/93, two days after President Clinton took office. You also might be interested in this entry from the CFTC History page:
“January 22, 1993—Using new exemptive authority granted in the Futures Trading Practices Act, the CFTC exempts certain swap agreements and hybrid instruments from regulation under the Commodity Exchange Act.”

That exemption was passed on the last day of Mrs. Gramm’s tenure.