Political Punch Podcast: Rep. Paul Ryan, R-Wisc.

How about a comment on this?????
Enter Cede & Co II; The Fed Is Now Backstopping $25 Trillion In DTCC Cleared Credit Default Swaps
Tyler Durden’s picture
Submitted by Tyler Durden on 02/10/2010 15:40 -0500
You thought the $23 trillion in backstops for the financial system was bad, you ain’t seen nothing yet. Earlier today, the Depository Trust & Clearing Corporation, best known for its Cede & Co. partnership nominee which is the holder of virtually every single physical stock certificate in the known universe, and accounts for over $2 quadrillion in stock transactions per year, announced that “the Federal Reserve Board had approved its application to establish a DTCC subsidiary that is a member of the Federal Reserve System to operate the Trade Information Warehouse (Warehouse) for over the-counter (OTC) credit derivatives.” With this approval the DTCC is now the de facto legally accepted global repository for over-the-counter credit derivative transactions. Simply said, the Federal Reserve is now the guarantor behind all CDS transactions that clear via DTCC, which would be pretty much all of them (sorry CME, you lose). The total bottom line in terms of gross notional? 2.3 million contracts with a gross notional value of $25.5 trillion. When the next AIG implodes, and the CDS market is once again facing annihilation in the face, who will be on the hook? You dear taxpayer, that’s who.
The new Fed-endorsed organization will settle CDS obligations in all currencies and process credit events. It will also include all OTC credit derivatives traded worldwide, and will be regulated by the Fed and the NY State Banking Department and will be overseen by other US and International regulators.
To be sure, the net notional CDS amount, which is what counterparties would be on the hook for in the case of an orderly unwind of the financial system, is materially lower than the gross total. Yet, as systemic unwinds are never orderly, gross tends to become net in those occasions when Lehman bonds go from par to 10 cents in the span of 24 hours. Should systemic risk flare up again (and this time Europe will be both shaken and stirred, thank you Mr. Hazard… Moral Hazard), and fiat-based market values quickly catch up with fair values (which in our ponzi economy can easily be calculated: they are all zero).
The actual organization that will soon be in need of a bailout, is the Warehouse Trust (there’s that word again) Company, which in turn will operate the DTCC’s Trade Information Warehouse, and will begin operations “once certain organizational conditions have been met, which are expected shortly.” Presumably, the TIW, which has been in operation for just over one year, is somehow supposed to inspire confidence that the DTCC has an idea of everything that goes on in the quadrillion + CDS Market. “The release of this information has been an important step forward in helping increase transparency in the marketplace. More detailed information on individual firm trading has been made available confidentially to regulators around the world with the consent of market participants.” Oh great, at least someone has information to the confidential information.
What all this implies is that basis spreads will likely compress very shortly, once counterparty risk becomes a thing of the past and all systemic risk in the biggest derivative market out there (ex IR swaps) is fully backstopped by the Federal Reserve. It will also guarantee the DTCC monopoly status when it comes to CDS trading as nobody will desire to transact and/or clear elsewhere.
We shudder to think if the Fed grants DTCC with exclusive status for IR and FX swaps as well, and the associated $600 trillion notional outstanding.

He argues that Republicans need to stand firm on their principles, but he admits that former President George W. Bush and Republicans were not fiscally irresponsible when I pressed him on that.
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NOT fiscally irresponsible? Gotta be a typo.

Who’s snubbing who

Ryan needs to be asked why he is so intent on destroying Medicare and Social Security and leaving old folks to wither and die.
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It IS hypocritical that those who were asking Democrats and President Obama that type of thing (and who spent a lot of time fear mongering among seniors) aren’t willing to ask Ryan.

I keep wondering why we couldn’t us commoners just pay our premiums to Medicare and get the same coverage that 65 and overs get.. the programs are already in place.. what’s a little more underfunding? Then the insurance companies would be left to depend on the cadillac peeps.

Rep Ryan appears to be a straight shooter – tells it like it is. Making social security and medicare solvent won’t be easy. Most politicians duck the subject in an election year. At least he is trying to do something before it becomes a full blown crisis.

tierra —- Wow, obstructionists to a supermajority! Considering the poor vetting that has gone on in this administration, I believe we should hold any nominees to a mediocre standard at least don’t you? You constantly complain about the GOP without offering any ideas. Blame Bush is out the window, now it’s time for you to grow up and start blaming those in power. Otherwise, you are out of touch with reality.

First of all thanks Jake for the thorough interview, so helpful.
1) Ryan needs to be asked why he is so intent on destroying Medicare and Social Security and leaving old folks to wither and die.
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Did you even listen to his proposal it won’t change ANYTHING for people over 55.
2) Then please enlighten us on why Obama recently said he will meet the GOP “halfway”? This would indicate they were not meeting anywhere near half way previously.
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Posturing but it’s quite disingenuous to offer to meet people “halfway” on a dead bill your own side can’t even pass.
3)Also to anyone (no matter the party) like Rep. Ryan please ignore the attack machines people are genuinely listening for good ideas use the internet like he has/is and take time to explain your ideas.

THIS ARTICLE SAID: “When it comes to health care, Ryan is proposing a drastic change to Medicare, a plan under which seniors get a voucher to buy private insurance.”
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Hmmm… will this really solve the problem?
The problem with our medical system lies in the natural greed of human beings…we all want more. Between the insurance companies and the medical facilities being paid by insurance companies, cost for medical care has become outrageous.
Providing “vouchers” to seniors is only a new method of feeding the beast for it’s unending thirst for more (higher salaries and more bonuses). That thirst will never be put in “check” unless some new, large, competition is introduced in the insurance market that gives private insurance a run for it’s money (right now, private medcial insurance doesn’t even “crawl” for the outrageous profits they make each year).
Such competition for private insurance can only come in the form of a government sponsored health insurance program where people are afforded the opportunity to pay monthly premiums into a health plan that is NOT out to increase its profit margin every year.
Again… “vouchers to purchase private insurance” is just another way of feeding the beast, through a different payment method! The problem will still be there.

Mr. Ryan…it appears that your party doesn’t realize that it was Not elected by the people,
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Paul Ryan was just as elected as Barack Obama, or any Democratic member of the House.
The people who elected him wanted him to represent their interests. And that’s what he’s trying to do.

Mr. Ryan, your party has Voted NO on everything this Congress has worked on
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And yet the dems still passed what they wanted to.
Mr. Ryan, your party is now suggesting that President Obama fire Sec. Brennan for calling for it the way it is…Brennan Worked for GWBush!
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Doesn’t quite sound like you’re saying the repubs in congress are a continuation of Bush but Obama is.
Mr. Ryan, the Shape that Your party left this country in, is Not simply irresponsible, but Criminal.
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What’s criminal is submitting a budget that even your own party says is unsustainable.
At least Mr. Ryan is attempting a substantive approach that even independant evaluators like the CBO say is helpful at addressing our current problems. Who cares what party he is from I hope more like him show up and work hard whatever their party.

Mr. Ryan, your party has Voted NO on everything this Congress has worked on
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And yet the dems still passed what they wanted to.
Posted by: GO | Feb 10, 2010 7:22:47 PM
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Are you kidding? Do you know how many of this administration’s appointments have been held up by Republicans?

Are you kidding?How long has it taken for Corpseman Obama to even nominate candidates for the positions that tierra claims the Republicans are holding up?It took Corpseman Obama eight months to even nominate a candidate to head TSA; when he did nominate someone it was an individual with terrible baggage.Once that baggage became known the individual quit.Many of his appointments have been horribly unqualified-when they become exposed they quit;maybe Corpseman Obama can learn from this.but I doubt it.Doug Wilder can see what is happening.

Are you kidding? Do you know how many of this administration’s appointments have been held up by Republicans?
Posted by: tierra
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Who cares? They’d have put the brakes on that pedophile czar if they’d had the chance!

Has it dawned on some here that when a majority of people voted Obama and the DEM in, Gave them a majority in both houses, they did so to have them pass the healthcare reform and fulfill other promises they made. While your GOP constituents OBVIOUSLY are against these, acting in a partisan way trying to block any promise from materializing is depriving the majority from what THEY want done. GOP has to acknowledge that a majority of US citizens want things done that THEY don’t like, and accept to work on their behalf as well as for people who voted for them. Getting provisions and amendments that would address concerns of the minority is the reasonable thing to do, trying to prevent the majority from getting what they voted for is irresponsible.

If you look on #### at their budget proposal like I did, you don’t see a whole lot there at all. All I saw when I read it were spending cuts with no plan to actually reduce the deficit. Cutting corporate taxes, capitol gains tax cuts extended till 2011, but no mention of what wage earners will benefit. (Not to mention Obama is already going to cut capitol gains for small business.) And last but not least, increasing spending for the military. The republicans voted against increasing health benefits to the military in 2009! And all 40 republicans voted against pay-go, to help reduce the deficit!

My question to the readers who wait for anyone to post their comment, then they proceed to try to tear it up. Would any of you vote for a healthcare program that includes all the exemptions such as the union exemption from paying the tax on their insurance policy. Although they wouldn’t have to pay, the so-called Cadallic tax shouldn’t have been there anyway. How about all the pork for things other than healthcare. I admit we need healthcare reform, but com’on, this 2700 page bill was so out of this world in content, it shouldn’t even be used as toilet. I think Americans are too intelligent to turn their cheek just to say we have a healthcare bill. Let’s get serious. We have got to demand a simple healthcare bill that address’s healthcare. Not PORK!

The federal government has stolen trillions of dollars from the American peoples Social Security trust fund. Now they are saying the trust fund is going broke. Quit lying to the American people, you have been caught and exposed for the thieves you are.

Ryan has serious ideas, alright. A return to fiscal responsibility. Does the phrase “Reagan Democrat” mean anything to anyone here? If more Republicans like Ryan keep speaking up, the Reagan Democrats will be coming out of the woodwork in 2010.
This is the essence of the Republican resurgence. The message of a return to traditional Republican values of fiscal responsibility (admittedly abused under Bush/Harkin) is resonating with Independents and moderate Democrats. Unsustainable spending, whether it be for Obamacare, capntax, whatever, is scaring citizens to death.

Every couple of years the Republicans come back with the same line. “We were not so good on the spending side” If I had a nickel for each time I heard that, I’d be a Republican (the rich kind, not the dumb kind)
How many of them voted against the unnecessary attack on Iraq? How many of them are at this moment putting holds on Obama’s nominees in a blatant attempt to get more pork?

The Democrats voted down, on party lines, over 400 amendments offered by the GOP during the health care debate. Who is really the “Party of No”?
BTW, for the folks claiming the increase in the FICA tax in the 80′s (approved by a majority Democrat House) was to make the deficits look better, reread your history. it was to keep Social Security solvent into this century. In other words, to push the problem off to another generation. As our 1.9 trillion deficit will do with today’s problems.

Lower Taxes, Smaller Gov’t, Less Spending, Decrease Deficit…I’ve heard this from Republicans my entire life.
But in the last 60 years NOT ONE Republican President ever lowered the deficit, decreased spending, submitted a balanced budget, or reduced the size of government. Not W, Bush Sr, Reagan, Ford, or Nixon.
Why should anyone believe that they are going to anything differently? History proves in practice they do otherwise.
People like Palin and other Pubs are again giving us the same rhetoric. And once again, they’ve proposed no real solutions, just the same empty platitudes and attacks.
Bush and Reagan did cut taxes. But at the same time Bush doubled the deficit and Reagan tripled it. And the tax rates under Reagan were over 10% higher than they are now. (I never realized we were all “socialists” under Reagan. Who knew?)Pubs like to forget interest rates were double digit. (See what kind of house you can get at 14% interest)To say reducing taxes caused economic growth ignores the impact of the massive spending they did.
Seems many on the right like to cherry pick history and then try to re-write it.
So how about instead of pointing fingers at the current President and blaming him for all the ills of the nation – which was a bi-partisan effort started years before he came into office – look at whose really stopping progress right now.
This political BS is not about spending. The new batch of self proclaimed “fiscal conservatives” never said a word when we borrowed billions from China to fund Cheney’s follies. Why not? Because Cheney was a Republican. So it’s obviously about politics.
And if Americans ever REALLY want to lower our debt, we’ll have to face reality. Quit expecting easy solutions, and accept that taxes will have to go up. We will never tax-cut our way out of debt.
America has been deficit spending since 1957… time to pay it back.

FINALLY – A SENSIBLE HEALTH CARE PLAN!!!!!!

Ryan’s plan for Social Security is cruel. With people not able to retire until 70 he is actually reducing the number who will ever collect. Insurance companies did a study of death rates. Those who retire before or when they reach 65 have a really good chance of living until they are 80. Those who retire after 65 have a much less of a chance of reaching that milestone. The medical experts who conducted the test say the stress of working full time after the age of 65 is much harder on the body. That is why those who retire earlier live longer.
So Ryan’s plan of raising the age of retirement to 70 will guarantee many won’t make it to retirement at all.

Andy Stern makes some great points in an interview at Talking Points Memo (Stern: Ryan Roadmap A Harbinger Of Return To Bush-Era Government):
‘”It’s hard to imagine that this is a 21st century plan,” Stern told me in an interview this afternoon. “It seems like we’re going back to the future.”
“Particularly when George Bush inherited a surplus and drove it into a massive deficit, I’m not sure we should trust the Republican party’s rehashed ideas to not just bankrupt the country in the end,” Stern said.
I asked Stern whether it was fair to view the Ryan plan as a sneak peek into the governance of a potential Republican majority. Absolutely, Stern said.
“[Ryan] and Eric Cantor are the future of the post-Boehner group. For a group of people who keep saying we want to come to the table because we have all kinds of ideas, particualrly new ideas, these look like bad ideas,” Stern said.’
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I have to say the latter reminded of Eric Cantor’s “magic pony show” in regards to his jobs ideas (they amounted to nada.) But I do think Paul Ryan could come up with something useful IF he was willing to actually work with Dems and debate it all out and think outside the same ole box, which hasn’t been beneficial in the long game– at all.

Posted by: Stanley | Feb 11, 2010 10:43:17 AM
You’re misinformed. Go back and look at who has tripled deficits and so on– check the track records, then post some actual numbers for us. That would be worthwhile (I mean, funding war on borrowed money is always a good idea, right? lol. )

It is so simple – Just do the right thing – you know what that is. Do the things that Americans, your family, mother and father would be proud of.
Don’t be clever; don’t rationalize your positions, stand up for the people who elected you to speak for them.
The Democrats clearly have stated that we the great un-washed are too stupid to know what’s good for America and that they and they alone what know what is best us.
The Democrats having the majority was a good thing for it exposed them for who they really are. They represent a small minority of left wing Hollywood types and Eastern liberals (fat cats). Half a– intellectuals who think they are better than everyone and hate any who disagree with them.
Its been a good year for us in another area, the main media news groups showed their bias in reporting which helped Obama get elected. We now saw how the media tries to control events. I figure the bias media was good for about 3% for Obama.
We now know that we can no longer trust the news media for the straight story, they are not fair nor balanced. No matter how much they tell they are, they are lying. They showed us all who they really are.

I think raising the full benefits age from 65 to 70 actually is something reasonable to consider. If enacted it wouldn’t apply to anyone currently over 55. Also if the life expectancy has changed that much sine the orignal 65 was passed then it would be very similar to what people originally had planned when the SS was first enacted. Also if people are aware they could plan accordingly for those leaner years just like they currently do when they hit 65. For someone unable to physically do that there are some other programs they are there now that weren’t when SS was first set up.

I think raising the full benefits age from 65 to 70 actually is something reasonable to consider. -posted by GO
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The idea does have a lot of merit. It would increase the number of years a person pays into the Fund while reducing the number of years the Fund would pay out for that person.
But there are some negative aspects that must be considered.
(1) The higher the age of retirement means the longer a person will hold a position in the work force.
(2) That means more people competing for jobs in addition to population growth.
(3) More people competing for a fixed number of available jobs means higher unemployment.
(4) Higher unemployment means an increased demand for social programs such as unemployment insurance, Medicaid, and welfare financial assistance.
I’m not saying increasing the age of retirement is unworkable; but those 4 points must be balanced with the impact of perserving the Social Security Fund.

I’m not saying increasing the age of retirement is unworkable; but those 4 points must be balanced with the impact of perserving the Social Security Fund.
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You seem to be making a lot of static assumptions about our positions in our workforce and population. The large bubble is hitting 65 soon. Also they may not be competing for the same jobs and hopefully new jobs are developing.
One personal example -we have some family members yes who did indeed keep their same jobs long past 65. They worked into their 70′s before they retired. We have a family member who in their 50′s was physically unable to continue working at their same job. They felt like 65 was so far off. Thankfully they were able to find another less physically demanding fulltime job with benefits at a newer company that had just started that they now enjoy and see themselves working past 65.

These folks want to keep what they would pay into Social Security so they have more to invest.
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Also so that it’s theirs- you can call it selfish if you like. However, they can accrue savings and give it to whomever they choose, whenever they choose. If I work until my 70′s but have been putting $ into SS since my teens then I’m probably not going to get back all I’ve put in but maybe I can leave it to my grandkids or anyone else if I want that doesn’t happen with SS. Call me selfish.
Also if I were putting money into a bank to invest for later and that bank says oops sorry we’ve used your money to pay other things so now there’s nothing left of what you’ve put into your account (which is where SS is headed). SS has been used to take $ for other gov’t things and it’s insolvency is a real issue to younger folks. You might call it pandering but some of us what some real discussion about how to address this especially with a government that’s mandating we keep paying it and projecting unsustainable budgets.

Republicans have no independent thought process of their own. They all spout the same things, over and over, year after year. Is there anything in their arsenal besides tax cuts, do away with Medicare, privitize Social Security and Tort Reform? Is that all they’ve got? These people are so clueless hence our current situation. Lemmings, every last one of them.

I am not in favor of expending retirement age unless the bill also states that the government cannot use the money paid into SS for other things. While raising the age will help in theory, I don’t think it will improve the situation if government is just going to spend the surplus from those extra five years on other parts of the budget or pork barrel.

Now I will throw out a crazy idea, which means I haven’t thought it completely through. What if people qualified for SS between 65 and 70 if they do volunteer work or 10 hrs a week or 520 hours per year. Number of hours is just a wild guess. This would greatly benefit many good non-profit organizations that help people. If could be hospital care, meals on wheels, tutoring or mentoring children and teens. After 70, no one is required to do volunteer work, but many may like it and want to continue. Another option might be day care provider for your grandkids with some type of stipulation of how many hours per week or year. This seems like a win for everyone.

Now I will throw out a crazy idea…
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Interesting. Never underestimate crazy ideas– they lead to thinking outside the box and coming up with workable solutions that aren’t just retreads (though I tend to agree with chunks of– or maybe my own version of chunks of– what malcat and CND fox have posted)

It is refreshing that a republican may have an original idea not taken from some old idealogical philosophy that hasn’t worked in the past. Imagine if Social Security had been privatized like the republicans had wanted before the fiscal melt down. It would have been disastrous for millions of Americans. Please lets not rekindle these same tired old notions that haven’t worked in the past and could lead to extreme civil strife.

The volunteering is an iteresting idea, especially if you incentivized it to get around some legal issues and give people broad choices to suit personality, temperment and ability. I would like to see more choices in the structure and certainly volunteering would be one.
Malcat’s point about SS is also a good one although you forgot the group of people who may have wisely invested and a wretch duped them (Madoff comes to mind). I understand the importance of security I just think there could be more flexibility and greater input from the individual (should they choose) as to how they want to responsibly handle that. Yes some people will be foolish but to say to everyone because there are foolish people we are going to treat you all like fools and apply those same things to you is limiting. I also think if people are going to be that irresponsible they are probably being paid under the table anyway so they are still gaming the system.
I actually do think people in a mental hospital would fall into the group that can’t provide for themselves fully although why they were getting money from SS (unless it was disability) while they were in a place where most things are provided seems odd. It would be even more odd if it were a government run hospital.
Anyway I think the government run by different political groups has been IRRESPONSIBLE with things they mandate we entrust them with and I am glad to see someone like Rep Ryan stepping up and seeing that responsibility and trying to put forth ideas that own up to that responsibility. Frankly before I would trust them to encroach any further into people’s lives they should show they are responsible with these things already otherwise we would be stupid to allow them any more. I’m sure those people who invested with Madoff would never invest with him again and be careful with anyone else. The fed government should have that same standard applied to them.

It’s difficult for an “adult thinking” Republican (or Democrat) to get anywhere in Washington DC. The cards are stacked against that sort of person. Political favors in exchange for campaign support prevents politicians from “adult” thinking. The GOP cartel works hard to insure it’s members think and act the “right” way. A similar cartel exists with the Democrats, tho it is weaker.
Good luck to Paul Ryan, but don’t hold your breath.

I understand Rep. Judd Gregg has offered an interesting proposal for a cut down health care reform plan which would offer catastrophic care and incentives for people to do things to stay healthy (stop smoking, lose weight, etc.).
I’d like to see more reporting on this. Health care reform is imperative. Otherwise, both the middle class and the nation will be bankrupted by health and health care insurance costs and our overall health will decline.

Republicans, unlike Democrats, tend to accept their responsibility for what goes wrong.

Starting in 1981, the Republican Party deliberately drove up the national debt to end social security, medicare, and a host of other programs that aid the middle class. This could be viewed as treason (where are you Ann Coulter when we need you?). Don’t take my word, read those of David Stockman. Why? An impoverished middle class is easier to control, and that’s what conservatism is all about. Conservatism here, in the old Soviet Union, China and other places is UGLY!