ECON Financial Experts: What does this mean?

[davidinthewilderness]

Every field has it's lingo and I am trying to figure out what this means in plain English. Any ideas?

House Ag Committee Approves Financial Regulatory Legislation

The House Ag Committee reported out of Committee six pieces of legislation last week that will ultimately allow end-users, such as agricultural producers and co-ops, to avoid over-regulation. Namely, the bills will ensure that end-users can continue to use instruments such as derivatives and inter-affiliate transactions without being classified as swap dealers and without the imposition of costly margin requirements. (Staff Contact: Brad McKinney

Thanks to anyone who can translate!

Celeste

 

[mzkitty]

It means the big boys get another break.

 

[davidinthewilderness]

MZKitty,

Can you be more specific? In all that animal surveillance and regulation I dug through it quietly mentioned things like derivatives (as justification for their Vision 2015 project). If I can understand what they are saying here, I can see if it is part of those 150 pages that are being implemented. I don't want to mention anything if it is an apples vs oranges thing.

Thank you!

Celeste

 

[Garryowen]

It means we aren't supposed to understand what it means.

 

[mzkitty]

It means they can play in derivatives and not have to put a lot of money down.

I'll let the more expert financial people explain in more detail.

 

[davidinthewilderness]

That is what I thought. What I do not know is:

What is a swap dealer?

What is an inter-affiliate?

What is a cost margin?

I am trying to figure out (at least in the area of agriculture) what the smucks are up to.... I know they do not want us to know, but it is our duty to be educated and learn so we can expose the shysters!

They have some ugly stuff along this line buried in that pile of Veterinary Services and who would ever look there ?

Celeste

 

[davidinthewilderness]

Could an inter-affiliate be another agency?

Celeste

 

[Troke]

To coin a phrase, the Ag committee wants their clients (Big Ag) to continue to have the economic 'free fire' zone (metaphor there) that currently reigns everywhere. After the econ debacle of recent years, exacerbated by the machinations of Big Finance, Congress (SEC?) is considering reigning them in by making their activities more transparent and also requiring that there be financial backup (larger margin requirements) for whatever scheme they have in mind.

Needless to say, this would cut down on profits made, not be producing something, but by manipulating wealth as measured by money. So the Ag Committee has come up with this scheme to allow the 'producer's to continue doing so because they are producers and thus are good honest folk.

 

[bw]

It means a bank can buy an agricultural co-op or maybe just a farm, reclassify itself as an end-user, and do deals that would otherwise be illegal.

It's not about protecting end-users, it's about finding new sheep's clothing for wolves to wear.

 

[davidinthewilderness]

Oy! It just get uglier and uglier. My expertise has never been in the financial realm (no duh) but in other areas, so thanks for those of you patiently willing to help me along in understanding all of this financial stuff.

I know the farmer's in this area have been devastated by some of the financial wranglings, these are not big ranchers, the little guys.

Celeste

 

[banana.republic.us]

If I'm a farmer and want to sell this years crop I don't need to secure it because it's in the ground. If I wanted to sell a million bushels and they CONsidered me a dealer they may ask me to post security in the trade ie margin. I don't know what it would ammount to, but I'm sure it would be tough, considering the capital might be invested in tractors, fuel, fertalizer, and seeds.

 

[RJC]

It means the agricultural producers told the government to stick their newly found powers of financial regulations (FinReg) where the sun doesn't shine. The government said "Oh OK! "

 

[Milk-maid]

If I'm a farmer and want to sell this years crop I don't need to secure it because it's in the ground. If I wanted to sell a million bushels and they CONsidered me a dealer they may ask me to post security in the trade ie margin. I don't know what it would ammount to, but I'm sure it would be tough, considering the capital might be invested in tractors, fuel, fertalizer, and seeds.

contact Ann Barnhardt at barnhardt.biz
She ran a commodities brokerage for ag farmers and now gives advice and classes to farmers on how to avoid the mainstream commodities trap and how to work outside of it.