CFTC, Hank Paulson, Treasury

CFTC Big To Treasury: Drop Dead

Treasury Secretary Hank Paulson’s “blueprint” for revamping the financial regulatory system is already coming under fire from powerful agency heads. As early as Friday, even before the details of the plan were widely-known, the plan was lambasted by John Reich, the director of the Office of Thrift Supervision, which oversees the savings and loan industry. Immediately after Paulson’s speech this morning, Commodity Futures Trading Commission big shot Bart Chilton released a colorful and blisteringly critical statement describing the plan as “moving boxes around in Washington DC.”
Paulson’s plan would combine the Securities and Exchange Commission, which regulates equities and debt markets, with the Commodity Futures Trading Commission, which that regulates the exchanges trading commodities and financial futures. The two commissions have very different regulatory approaches, with the SEC favoring direct regulation and a rules-based approach and the CFTC favoring a principles based approach that relies heavily on self-regulation by commodities and futures exchanges. SEC head Chris Cox has been described as being disposed to supporting the plan.
After the jump, we delve into the dirty, metaphor-strewn past of the CFTC commissioner.

The thing you need to know about Chilton is that the man loves his metaphors. Last year, he described he commodities regulation in terms of highway safety. Politicians love these road metaphors—think about Al Gore with his information super-highway or Bill Clinton’s “bridge to tomorrow”—but Chilton really went the extra mile. “To continue with my traffic cop metaphor, it’s like those commercials for drunk drivers: don’t even try it, because the road blocks are set up, the sobriety check points are in place, and we’ll make you walk the line. And if you stumble, we’ll make you pay the price,” he said.
This morning’s statement was no departure from form. This time it was a medical metaphor that fired up Chilton’s prose.
“I think most Americans would prefer that government do our jobs, and that means doing everything possible to cauterize the subprime mess before performing major surgery on a regulatory system, parts of which are still very healthy,” Chilton said. “We shouldn’t be about trying to cure what isn’t sick. There is enough on the table, right now, that needs healing.”
So why the different reaction from Cox and Chilton? Part of it may be an anticipation of where the bureaucratic authority will shake-out. Despite media accounts describing the authority of the SEC perhaps being diminished by the plan, Cox may understand that the SEC apparatus will eventually dominate the regulation of all these markets. Clearly, its regulators have more respect and are regarded as more experienced than the CFTC. So this expectation might not be unfounded.
But the divergent reactions might also be a function of the different backgrounds of the two men. Cox is a creature of Republican party politics, with a long history of electoral experience and political ambitions to rise even further. He has been mentioned as a possible nominee to the Supreme Court, and may have his eye on a cabinet level position in a future Republican administration. He may even want to run for president himself. He may be ready to get on board with the blueprint because he wants to appear more reform-minded rather than a defender of bureaucratic turf.
Chilton, as far as we know, has never even run for dog-catcher. He’s been a long-term apparatchik, a member of the permanent regulatory class that dominates much of the administrative state from behind the scenes. He spent a the eighties and the early nineties as a legislative director to various congressmen, mostly those with farm-lobby connections. During the Clinton administration he served as deputy chief of staff to U.S. Secretary of Agriculture Dan Glickman. From there he went to Tom Daschle’s staff. Last year, he was sworn in as a CTFC commissioner. He has all the markings of a bureaucratic infighter tied to a lobby—the agricultural lobby—that might be worried it would lose influence under a new regulatory structure.

Statement of Commissioner Bart Chilton on Treasury Blueprint

(hidden for your protection)
Show all comments

85 Responses to “CFTC Big To Treasury: Drop Dead”

  1. guest says:

    Another way to look at it: Cox is an ambitious career politician eager to create the illusion of ‘change’ in order to win brownie points (think Spitzer or Dinallo); Chilton is a technocrat who’d much rather focus on doing his job rather than taking part in Paulson’s publicity stunt.

  2. guest says:

    As someone who worked at the SEC and who has been subjected to a periodic audit by the National Futures Association, I’d say the NFA blows the doors off the SEC and the NASD in terms of their efficiency and effectiveness. The NFA should be the template on which this new super-regulator is based.

  3. ab says:

    A bit harsh on Chilton, I’d say. Sure, he wants to protect the stature and influence of his agency. But if you look at the two regulators, the CFTC does seem less heavy-handed. As much as everyone would like a single regulator, keeping the CFTC out of the limelight (and thus out of the sight of the pols in Washington) has allowed it to approach regulation with more flexibility and common sense. This is one reason US futures exchanges have grown in influence while the securities exchanges have lagged their foreign competition. One giant regulator is sure to be an easy whipping-boy and political tool when something goes wrong and populism boils up again. Innovation could end up getting smothered under the weight of overzealous risk-averse regulators.

  4. guest says:

    Interesting comments about the CFTC. I am somewhat surprised that the Bush Administration couldn’t get all their ducks in a row prior to Paulson’s press conference. If the federal agencies are going to fight among themselves, and have different constituencies to answer to, how in the world does the Administration propose to get this off the ground?
    Or is it only window-dressing?

  5. guest says:

    I once worked for one of the self-regulatory organizations under the CFTC.
    The derivatives exchange like to keep the feds out of their business. They have enough political power that they can do so.
    The regulation of these exchanges probably isn’t as strict as it is at the SEC, but that’s OK. All the the constituents do a pretty good job, all things considered, of policing themselves.
    There are enough cutthroat people on both sides are pretty much every issue/trade/agreement that stuff balances itself out.
    Sure there are people who cheat the system, but I’d guess that the markets under the CFTC as are fair as they are anywhere.
    Personally, I don’t see much benefit to merging the SEC/CFTC. It’s an idea that’s been around for a while. Plus, the current problems in credit markets have nothing to do with anything under the purview CFTC.
    Now, this is beyond the immediate scope of Paulson’s problems, but I think a lot of problems could be resolved by trying to get as many tradable things off the OTC market and onto exchanges.
    I mean, given the size of the ABS market, the way these trade is almost comical. There’s a better way to conduct business for dealers to send out emails to a few hundred people every day. There’s no transparency at all.
    If some 21 year old kid can set up facebook and connect millions of people to one another, why can’t someone do the same thing for ABS?

  6. ab says:

    The dealers probably COULD do that – they don’t want to. With the transparency of exchanges, OTC products become commoditized, prices are out there for all to see, and the dealers lose some fat spreads.

  7. guest says:

    Yes look at what has happened to corporate bonds since Trace. I think CDS would be a natural fit on an exchange, and a central clearinghouse and good technology would clear up counterparty risk, but the banks have such a lucrative business right now they are loathe to cede it. Wasn’t someone launching CDS futures, to the sound of one hand clapping from the broker dealers.

  8. guest says:

    Indeed, I agree, I should have said “why won’t?” someone do such a thing. Heck, if I was a dealer right now, I’d be happy with business as usual.
    At some point though, I’d hope that there are strong enough incentives for someone some come along and shake things up. It’s ridiculous that the betting market for regular season NBA games is more transparent than the market for a senior RMBS bond.
    It almost boggles the mind that in 2008, the “OTC dealer” is still a viable business. Even a rudimentary exchange would solve so many current problems, in my opinion.

  9. guest says:

    If I had followed up and acted upon one of the many excellent DB posts I have read over the last few weeks I would be a lot wealthier after the market closed today. Not “Maltese Falcon” yacht owning wealthy, but, you know, a dinghy and a bottle of wine, a ukelele and a lot of laughs on the pond with someone who is “CNBC sweetie-type hot” and likes a weekend at the Ritz-Carleton because of the heated bath robes wealthy.

  10. guest says:

    @ 6:40, ok you big tease… Whats Up? Or now Down? as the case maybe…

  11. guest says:

    The CFTC has a much better reputation in Europe than the SEC in so far as being pragmatic and open to working on common issues. As a more principle type regulator it is more in line with the FSA and other European regulators and it would be a shame to lose the progress that has been made in working with other regulators so far by a merger. The whole Paulson effort appears to be a giant smoke screen to cover the fact that nothing is being offered to address one of the major reasons for the current crisis, the lack of transparency about bank financial statements. Higher regulatory capital, strict limits if not an outright ban on off balance sheet vehicles and consistent treatment for banks and investment banks while painful would give people a measure of confidence in the financial services markets. This Paulson plan which many parts had been in the works way before the crisis has just been tossed out to keep people busy until Bush’s term ends when it will become somebody else’s problem and business will go on as usual.

  12. Truly enjoyed this blog post. Truly getting excited about visit our website. Great.

  13. great points altogether, you merely gained a whole new reader. What would you suggest with regards to your submit that you simply made some days previously? Any positive?

  14. Hoof Care says:

    Thanks for your write-up. I have generally seen that a lot of people are desperate to lose weight simply because wish to look slim and attractive. However, they do not continually realize that there are additional benefits to losing weight as well. Doctors insist that over weight people are afflicted by a variety of disorders that can be directly attributed to the excess weight. The great thing is that people who’re overweight and suffering from different diseases can reduce the severity of their own illnesses by way of losing weight. It is possible to see a gradual but noticeable improvement with health when even a slight amount of fat loss is reached.

  15. Thankyou for this post, I am a big big fan of this internet site would like to keep updated.

  16. Definitely, what a fantastic site and informative articles, I certainly will bookmark your website. Have a great awsome evening!

  17. Rattling nice design and fantastic subject material, absolutely nothing else we need : D.

  18. 1st aid kits… thank you for the informative data you’ve here!…

  19. This site is my inhalation, very wonderful pattern and perfect written content.

  20. Jane wanted to know though your girl could certain, the cost I simply informed her she had to hang about until the young woman seemed to be to old enough. But the truth is, in which does not get your girlfriend to counteract employing picking out her really own incorrect body art terribly your lady are generally like me. Citty style

  21. wp says:

    I simply couldn’t depart your web site prior to suggesting that I extremely loved the standard info an individual provide on your guests? Is gonna be again regularly in order to investigate cross-check new posts

  22. Life’s road is full of bumps and curves. Know your rights when you hit a rough spot

  23. Santo Frie says:

    I got what you mean ,saved to fav, very decent internet site.

  24. Hey very cool website!! Man .. Beautiful .. Amazing .. I’ll bookmark your website and take the feeds also…I’m happy to find numerous useful information here in the post, we need develop more techniques in this regard, thanks for sharing. . . . . .

  25. very good post, i truly enjoy this internet website, keep on it

  26. eliko carpet says:

    I got what you intend, thanks for posting .Woh I am lucky to find this website through google. “Don’t be afraid of opposition. Remember, a kite rises against not with the wind.” by Hamilton Mabie.

  27. Good Post, I am a big believer in writing comments on websites to inform the blog writers know that they’ve added some thing worthwhile to the world wide web!

  28. You completed a few fine points there. I did a search on the issue and found mainly people will have the same opinion with your blog.

  29. eliko carpet says:

    Very nice style and design and fantastic content , very little else we want : D.

  30. I truly enjoy searching via on this internet website , it holds superb content .

  31. Romeo Louato says:

    Hello! Great goods, please perform keep us posted once you publish again something such as this!

  32. Katalog says:

    I’ve recently started a website, the information you provide on this site has helped me greatly. Thank you for all of your time & work. “A creative man is motivated by the desire to achieve, not by the desire to beat others.” by Ayn Rand.

  33. Hollie says:

    Really enjoyed this blog. Thank you Once again. Maintain composing.

  34. I gotta favorite this internet site it seems extremely helpful invaluable

  35. Anonymous says:

    Zune and iPod: Most people compare the Zune to the Touch, but after seeing how slim and surprisingly small and light it is, I consider it to be a rather unique hybrid that combines qualities of both the Touch and the Nano. It’s very colorful and lovely OLED screen is slightly smaller than the touch screen, but the player itself feels quite a bit smaller and lighter. It weighs about 2/3 as much, and is noticeably smaller in width and height, while being just a hair thicker.

  36. visit says:

    Among the list of negative effects that is certainly becoming stated within Reddish colored Fluff vitality beverages is it’s caffeine content material. You can find people that think that you will find high variety of caffeine becoming in a particular bottle of wine with this electricity beverage.

  37. zlewozmywak says:

    Thanks pertaining to another outstanding post. Exactly in which else can easily everyone find that kind of information inside composed in such a apparent strategy. I’ve a new presentation next week, and I continues to be on the look out for precisely the particular advice you have just shown me. Thank you.

  38. Kredite says:

    Hey there! I’ve been reading your website for a long time now and finally got the courage to go ahead and give you a shout out from Porter Tx! Just wanted to mention keep up the great work!

  39. Do you have a spam issue on this site; I also am a blogger, and I was wanting to know your situation; many of us have developed some nice procedures and we are looking to exchange strategies with other folks, why not shoot me an email if interested.

  40. I ‘m curious to find out out what weblog system you happen to be working with? I’m obtaining some minimal security problems with my own latest website and I’d like to locate something a lot more safe. Do you have any advice?

  41. I enjoy the submit. Much many thanks again. Great.

  42. I approximating this post, enjoyed this one show appreciation you for putting cheery. “He removes the furthermost ornament of friendship, who takes gone commencing it respect.” by Cicero.

  43. Howdy! I just found your site: CFTC Big To Treasury: Drop Dead Dealbreaker: Wall Street Insider – Financial News, Headlines, Commentary and Analysis – Hedge Funds, Private Equity, Banks when I was browsing It looks as though someone enjoyed your site so much they decided to bookmark it. I’ll definitely be returning here more often.

  44. Casino says:

    I am pleased that I found this site, just the right information that I was searching for! .

  45. I as well think thence, perfectly indited post! .

  46. Soon Hersey says:

    Wohh just what I was searching for, regards for putting up.

  47. Oh my goodness! Amazing article dude! Many thanks, However I am encountering problems with your RSS. I don’t know why I can’t subscribe to it. Is there anyone else having similar RSS issues? Anyone who knows the solution can you kindly respond? Thanks!!

  48. Hello my friend! I wish to say that this post is amazing, great written and come with approximately all vital infos. I would like to see more posts like this.

  49. Good – I should certainly pronounce, impressed with your website. I had no trouble navigating through all the tabs and related information ended up being truly easy to do to access. I recently found what I hoped for before you know it at all. Reasonably unusual. Is likely to appreciate it for those who add forums or something, site theme . a tones way for your client to communicate. Excellent task.

  50. A high level woman you must have a single body appearance. Is going to be most excellent construct, adult will require the customer via your self confidence and girls do picture drawn to because of your captivating looks. Albeit numerous men desirable to produce an really complete a great deal are undoubtedly all set to may possibly dozens of vexing physical trainings was required to grow their lean muscle mass. These grownup is generally hugely willing to fully grasp that the following is straight can surely have muscle and strength merely by swallowing an outstanding application identified Huge Muscle mass mass Contractor.

  51. escort says:

    That being said by use it all, planet is actually restored a little more. This situation in addition will this certain Skin tightening and starting to be moved and into the mood of these producing activities. everyday deal livingsocial discount baltimore washington

  52. wonderful post.Ne’er knew this, regards for letting me know.

  53. Abercrombie says:

    I real pleased to uncover this site on bing, just what I was searching for : D too saved to bookmarks .

  54. Abercrombie says:

    Someone necessarily assist to make critically articles I’d state. This really is the initial time I frequented your internet page and thus far? I amazed with the analysis you made to make this actual submit incredible. Excellent activity!

  55. Hello there, simply changed into aware of your blog via Google, and located that it is truly informative. I am gonna watch out for brussels. I’ll be grateful if you happen to continue this in future. Many people will probably be benefited from your writing. Cheers!

  56. I’ve gone ahead and included a hyperlink back to your web page from one of my clients requesting it. I’ve used your webpage URL: and blog title: CFTC Big To Treasury: Drop Dead Dealbreaker: Wall Street Insider – Financial News, Headlines, Commentary and Analysis – Hedge Funds, Private Equity, Banks to guarantee you get the correct anchor text. If you woud like to see where your hyperlink has been placed, please e mail me at: Thanks

  57. One important thing is that if you find yourself searching for a student loan you may find that you’ll want a co-signer. There are many cases where this is true because you might find that you do not use a past history of credit so the lender will require that you have someone cosign the borrowed funds for you. Good post.

  58. Really clean web site, appreciate it for this post.

  59. Emadstrearm says:

    Dry in the sun my website
    List of sites:

  60. Hey very nice website!! Man .. Excellent .. Amazing .. I’ll bookmark your blog and take the feeds also…I am happy to find a lot of useful info here in the post, we need develop more techniques in this regard, thanks for sharing. . . . . .

  61. sofortsex says:

    I identified your weblog web site on google and check some of your early posts. Continue to maintain up the superb operate. I just further up your RSS feed to my MSN News Reader. Searching for forward to studying extra from you in a even though!…

  62. If you’re stagnant proceeding the fence: grab your favorite headphones, head along to a Paramount Buy and solicit to advertise them into a Zune then an iPod and comprehend which one sounds enhanced to you, and which interface makes you smile added. So therefore you’ll know which is decent representing you.

  63. I too conceive so , perfectly pent post! .

  64. web site says:

    Nonetheless along with its attractiveness came up the particular rumors with regards to it’s unwanted side effects. The reasoning is when a little something is the fact great, in that case there must be one thing inside the factor that brings the contrary response. This may be on the list of thought processes the not-so-convinced people have in mind.

  65. But a smiling visitant here to share the love (:, btw outstanding pattern.

  66. Hello – I must say, I’m impressed with your site. I had no trouble navigating through all the tabs and information was very easy to access. I found what I wanted in no time at all. Pretty awesome. Would appreciate it if you add forums or something, it would be a perfect way for your clients to interact. Great job

  67. pretty good insights, but i kinda heard it before.

  68. I really like your writing style, great information, thanks for putting up : D.

  69. exceltdeefs says:


  70. Some truly excellent info , Sword lily I found this.

  71. Good Post, I am a big believer in leaving comments on blogs and forums to help the blog writers know that they’ve added something useful to the world wide web!

  72. I’ve only just started a blog, and the information you offer proceeding this website has helped me a lot. Show appreciation you for all of your calculate & work.

  73. I really enjoy looking at on this site, it holds excellent posts . “He who sees the truth, let him proclaim it, without asking who is for it or who is against it.” by Henry George.

  74. I simply could not depart your web site before suggesting that I extremely loved the standard info a person provide to your guests? Is gonna be back regularly in order to check up on new posts.

  75. Eun Joans says:

    I like this blog so much, saved to my bookmarks.

  76. Louis Coenen says:

    Some really nice and utilitarian information on this web site, too I conceive the style contains wonderful features.

  77. halina says:

    An extraordinary share, I at the moment with all this onto the colleague which had earlier been performing small analysis within this. And he then to tell the truth bought myself breakfast since I found it for him.. smile. So i want to reword which: Thnx with the treat! But yeah Thnkx pertaining to spending any moment to focus on this, Personally i do believe strongly about this and enjoy reading for this subject. If in any respect possible, as you become expertise, could anyone mind updating your website to fully grasp details? It really is incredibly ideal for me. Large browse up using this writing!

  78. marlena says:

    Really nice style and design and wonderful subject material, practically nothing else we need : D.

  79. Thanks for these tips. One thing I additionally believe is credit cards giving a 0% rate often lure consumers along with zero interest, instant endorsement and easy online balance transfers, nonetheless beware of the most recognized factor that may void that 0% easy streets annual percentage rate and to throw you out into the bad house in no time.

  80. Leena Doller says:

    I went over this internet site and I conceive you have a lot of fantastic information, saved to favorites (:.

  81. cash advance says:

    Greatest fighter toasts ought to entertain and supply prize on your couples. Initially audio system next to obnoxious crowd would be wise to recognize 1 specific gold colored strategy as to public speaking, which is individual interests self. finest man jokes

  82. Yay google is my world beater aided me to find this outstanding site! .

  83. I wish more people would put down sites like this that are truly provocative to read.