Scaremongering by Idiots

I read an editorial by the CEO of the US Chamber of Commerce a Mr Thomas J Donohue recently in which he did his best to scaremonger the effects of the Financial Reform Bills currently in Congress.

I'm not really sure just who his target audience is but one of his examples of the likely result of the new regulation is that "one day your beer could cost $2.50, the next $4.75".

This outlandish claim is predicated on the idea that the use of derivatives by non-financial companies will be included in the new laws being discussed. He complains that these users of derivatives who incidentally tend to use them to hedge will now have to post collateral, and that the amount of collateral could change daily.

Wake up Mr Donohue. The futures market which is what most non-financial companies use requires an initial margin payment, and yes, additional collateral can be called for in the event of adverse price movements. This is also standard practice under International Swap Dealers Association (ISDA) documentation.

He throws numbers around about the effects of the bill which appear to either be snatched from mid-air, or from surveys and analysis done by like-minded groups whose sole interest is to fight regulation.

He claims that this new regulation will tie up hundreds of billions of dollars in working capital, will cost over 100,000 jobs, and drive many "main street" businesses overseas.

I don't mind if someone disagrees with changes being mooted in this bill. But please do so with more than blind ideology, and yes, ignorance.