Trump Has MAJOR PROBLEM in Pennsylvania as DEM Senator SOARS
DON'T LET ANOTHER HEDGE FUND MANAGER BRING "DEATH TO OUR HOMETOWN"
FORMER SENATOR - DERIVATIVE SWAPS HEDGE FUND MANAGER - PAT TOOMEY WAS PARTLY RESPONSIBLE FOR THE 2008 FINANCIAL COLLAPSE:
“By the time of the 2008 crash, derivative swaps had grown into a market with a notional worldwide value of $600 trillion—ten times the annual output of every economy in the world. The state banking supervisors who Toomey said would “continue to regulate” swaps did nothing while traders at Merrill Lynch, Lehman Brothers, Bear Stearns, and AIG made bets they couldn’t possibly pay out on. Eventually, the system collapsed on itself.
“There was a lot of financial deregulation in 1999 and 2000, and Glass-Steagall repeal was just a part of it. In December 2000, Sen. Phil Gramm (R-Texas), a right-wing economist who went on to become John McCain’s economic adviser (he’s the one who said America was a “nation of whiners“), inserted an 262-page law called the Commodity Futures Modernization Act (CFMA) into an unrelated bill. (Read more about “Foreclosure Phil.”)
FROM:
https://www.motherjones.com/politics/2010/10/pat-toomey-derivatives-wall-street/
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WALL ST. CROOK DAVE MCCORMIC:
“Then the Keystone Renewal PAC, a super PAC supporting McCormick, recently launched a $30 million ad campaign supporting McCormick. One of the ads features McCormick promising to stop the flow of fentanyl into the country.
“Today we face a shadow growing on the Pacific horizon…I’m proposing a new [path]. Stop the flow of fentanyl, ban purchases of American land and US investment that supports the Chinese Community Party,” McCormick said in the ad.
However, federal tax forms show that Bridgewater Associates invested in China’s largest fentanyl producer, Humanwell Healthcare, when McCormick served as CEO of Bridgewater Associates.
In 2021, seven Bridgewater Associates hedge funds held close to $1.7 million in stock in Humanwell Healthcare, which is traded on the Shanghai Stock Exchange.
A 2022 Rand Corporation report on comparing the production of opiates stated that Humanwell Healthcare produces 90% of China’s fentanyl.
“Chinese law restricts production of controlled substances to nationally designated firms that must adhere to stateset production quotas. For example, legal production of several fentanyl analogues used in medical applications is concentrated in the Humanwell Healthcare (Renfu Yiyao), which owns 90 percent of the domestic market. This arrangement grants sponsored firms near monopoly status and might decrease the oversight burden,” the report stated.
McCormick served as the President of Bridgewater Associates from 2009 to 2020 and then the company’s CEO from 20202 to 2022 when he lost to Dr. Mehmet Oz in the Republican primary for US Senate.In 2023, McCornick told the American Enterprise Institute that he was responsible for whatever the company did.
According to the Pennsylvania State Police’s Overdose Information Network (ODIN), over 4,700 Pennsylvania residents passed away due to fentanyl overdoses in 2022. The report goes on to point out that the state’s opioid epidemic affects rural communities with 42.3 overdoses per 100,000 residents when compared to urban communities with 34.0 overdoses per 100,000 residents.
Casey called out McCormick’s investments in China during an interview with The Keystone last month, stating that Bridgewater Associates contributed to China’s financial well-being.
“When he was the CEO of the largest hedge fund in the world, he increased investments in China by over a hundred thousand percent,” Casey said. “So he contributed by way of the investment decisions he made – he contributed to the rise of China.”
McCormick’s campaign was reached for comment but did not respond."
MORE AT:
Dave McCormick invested in Chinese fentanyl before wanting to ban it during campaign
Author
- Sean Kitchen is the Keystone’s political correspondent, based in Harrisburg. Sean is originally from Philadelphia and spent five years working as a writer and researcher for Pennsylvania Spotlight.
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"The CFMA basically ensured the full deregulation of derivatives—completing the process that had begun in the UK in 1986. It was introduced on a Friday night two days after the Supreme Court’s Bush v. Gore decision and right before the Christmas recess. For better or worse (well, for worse), most members of Congress didn’t even read the CFMA or know what it did. It passed overwhelmingly because few people understood it, and it was attached to a 11,000-page, must-pass, pork-stuffed appropriations bill that was going to pass anyway. (Wendy Gramm, Phil Gramm’s wife, had been a key player in the partial derivatives deregulation from 1988 to 1993, when she was at the CFTC.)
Unlike most members of Congress, Toomey, the former derivatives trader, knew exactly what was going on with the CFMA—and had been pushing for it for months. In October, he had urged Congress to pass a similar bill—saying that it would “eliminate most of the cloud of legal and regulatory uncertainty that has shadowed” derivatives since their invention. Two months before that, he boasted to a House banking committee hearing that the derivatives industry “has done enormous good and has been an enormous force for positive change in our economy generally.”
Toomey’s derivatives cheerleading continued for the duration of his time in Congress. In 2001, he boasted on a campaign website that he had been “putting his experience in International finance to work” on “important legislation,” including the “authorization of derivatives trading.” In 2003, he praised the expansion of the derivatives market as “perhaps the most important, creative and innovative development in finance in the last 30 years.”
By the time of the 2008 crash, derivative swaps had grown into a market with a notional worldwide value of $600 trillion—ten times the annual output of every economy in the world. The state banking supervisors who Toomey said would “continue to regulate” swaps did nothing while traders at Merrill Lynch, Lehman Brothers, Bear Stearns, and AIG made bets they couldn’t possibly pay out on. Eventually, the system collapsed on itself.
Toomey didn’t see it coming. In fact, he has a history of playing down the threat of systemic financial problems. The planners of the 1998 LTCM hedge fund bailout were hailed on the cover of Time magazine as the “Committee to Save the World.” But for Toomey, the lesson of the committee’s work was not that the financial system was fragile or that highly leveraged financial institutions could bring others down with them. Nor was it that unregulated, off-exchange derivatives trading could lead to disaster. Instead, he promised Derivatives Strategy readers that he would “resist…any effort to impose inappropriate regulations.” After all, he said, LTCM was a “big problem” that was “essentially solved.” Not everyone agrees. “I have found virtually no evidence that the legalization of speculative derivatives did anything other than increase systemic risk,” Stout says.
In some sense, Toomey’s triumphalist attitude towards derivatives is unsurprising. It’s not just because his ideological conservatism predisposes him to loathe regulation. It’s also because unregulated trading of derivatives benefited him and his family. As Upton Sinclair said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” But perhaps a quote from Derivatives Strategy is more appropriate. After hearing Toomey’s positions on regulation, the trade paper rejoiced. Toomey’s “passionate discourse is music to the ears of derivatives players around the country,” the paper reported. And indeed it was. Unfortunately, things didn’t work out too well for the rest of us.”
MORE AT:
Mother Jones
Pat Toomey: The Wall Street Years
How the front-runner in Pennsylvania’s Senate race was at the forefront of the type of risky deals that have put American towns and school districts on the brink of fiscal ruin.
October 2010
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