that suggests to me that the cftc has very limited confidence in the product, or, the cftc is worried about manipulation. this is an extraordinary too focused, too much of a rifle shot product here where it would be too easy for people to manipulate the price and consequencely the market, that small market. i would like for you guys to come up with principles other than firewalls. if firewalls don't exist for any other commodity, it seems a big stretch to me for the cftc to say we'll come up concept for this particular commodity without a broader discussion with congress about the cftc's appropriate role and whether or not the cftc should be about the business of approving products with fwir walls. gets close to, wandering into, there's a big difference, at least historically as i understand it the big difference between the sec and cftc work where these exchanges are concerned. we want want insider information. it is all price discovery stuff. whatever information you get you bring it to the table. with the sec we're worried insider. they have authority to pursue insiders. you're kin

the iowa electronic arcus operates under no action letter provided by the cftc with the cftc says it will not take action against the university for offering political futures contract on their exchange. it seems to me that elections contracts with many of the same concerns we will hear from the next panel he had what is the price discovery for a change service the contract provides? with the ability of the pedestrian insiders in the case of elections that would be posters, consultants, media, using their knowledge to manipulate these market. and what is their utility. for example, is elected official ever going to short his own election in granting the relief in the electronic arcus to the cftc look at these issues and why are these markets provided? >> my understanding that this was originally done by or is being done and overseen by the university of iowa as an academic and a research -- a research undertaking. thursday dollar limitation on it. it is being supervised by the university. it's my understanding it's not for profit as well. under those circumstances, the cftc granted t

a earlier this week the cftc used the authority natural gas contracts to increase oversight. with an that's an example of how was written with bipartisan agreements yield of real results. derivatives legislation should have been handled this way. should have come out of the agriculture committee as bipartisan. my staff and chairman lincoln staff spent five months crafting bipartisan derivatives bill that should have been reported from the committee with support from both sides. unfortunately things fell apart just as we were about to circulate agreed upon discussion draft. this discussion draft that would have required clearing of swaps by swaps dealers and others to contribute to systemic risk. it would have provided the sec and cftc with authority to establish capital and margin requirements. would have allowed the cftc to impose an aggregate position limits and most of for the north would have provided a much-needed transparency of that's been absent from the swaps market. this would have represented 180-degree shift from current law that was in place in 2008. noaa tra

i think it's something that needs to be left to the cftc and the experts within the cftc. and i certainly think it's clumsy at best probably inappropriate for us to start listing different products that are not going to be subject to futures. what i'm interested in is sort of general guiding principles. and you mentioned that you didn't think it was such a good idea to have the firewall so insider information no matter where it comes from is available. you don't worry that a the effect of that will be to cause manipulation inappropriate ways and effectively undermine the attractiveness of the investment from the perspective of people who know dag gone well will be the guns that will get the information and know which thing this thing is going to move. they'll be dumb. of and they'll be chumps on the other side of the wall. and in such a rifle inquiry, what's going to be the success of this particular venture? would there be a market at all? >> i believe there would be. i believe that the same comment could be made with respect to every market. that there's people with more

and imad to the cftc are we inside the banks every year. i found actually because we have shrunk that we were not inside the exchanges and inside the clearing houses every year, just to do what's called a rule enforcement rule and we really need to be there every year and work things changes in the clearing houses, but to do that. of a third, our enforcement staff we feel we need to get it to 200. our financial crisis exposed more seems there require extensive staff resources and manipulation case is particularly take up to two years or two to three years. what dog is putting up for me is our overall funding requests and then i think my time will be up but our overall funding which you helped us get to it is one who assists and 9 million left and we are asking for $2,011,260,000,000 or 7245 full-time equivalents. much of tt is two keep current services and taken out more space because of the growth and have to have a cost of living increase and technology. but in addition to that of congress were to move forward as i hope in the next three

would it be the bank regulator, the cftc? >> the bank regulator would regulate the bank. >> the cftc would not be more and ball than that. >> we would regulate the exchange's if it was the standard -- if it were so standard that was bought and sold on an exchange, as we do now. we do that now on the chicago mercantile exchange's third we do not regulate the banks. we regulate just the exchanges in that example. for the clearing house. >> so they would not have to pay a separate fee if they were doing that. they would pay the fees that are already built and to the existing exchanges? >> i believe that that is correct. that community bank could do a customized tailored transactions that might not even come to a clearing house. but if it is the standard that the clearing house was there, they would bring it there. >> i understand that you and the secretary of treasury should say that the customize transactions, two parties that have worked together have adopted a customized derivatives for hedging operation where it cannot be cl

these are independent agencies, the sec, cftc. work with the department of justice to determine if criminal charges should be filed. if they find something from the recent charges, they will pursue that with all vigor, but i have no idea why criminal charges have not been filed against someone. host: you have accused the white house of getting involved in this process. why do you think that happened, where do things go from here? guest: the white house clearly thought that it was in their interest not to have a bipartisan bill at that time. i hope that they are changing their mind. senator lincoln and i had an agreement that was workable, that transparency, did all the things that the white house wanted to see done. we can have this agreement over what% of transactions should be cleared -- percent of transactions should be cleared. they knew this was going on. it was not something that was not available to them. they would be better off to move in another direction. host: i want to point out this "new york times" ppiece, talking a

in fact, the exchanges are no longer proposals because cftc has approved both the cancer exchange and the truth is media exchange in the lastly. i understand what the exchanges have been approved the actual contracts are pending. commission review and approval. hopefully mr. berkovitz will elaborate on the process. up until a few weeks ago i'd never heard of this concept. and i'm simply here to learn about a new exchange, the contract of those exchanges plan to trade and benefits and challenges that each may present. the commodity exchange act set forth a set of standard and exchange must meet before it is approved by the commission but i hope to learn how each exchange has met the standard and the you by the commission in reaching its decision. for instance, i hope the commission and what is that when economic relevance of these exchanges and the potential contracts that these changes will take the guy also wanted of these exchanges will prevent potential fraud and manipulation that might occur. in addition there are some witnesses that have concerns about the contracts and i want to

they came in with the cftc. we had kind of a counterpoint are arranged by you, madam chairman.that was very constructive. this was about the differences. how do we make certain that this is being done in a way that will not have unintended consequences with respect to financing the united states and will not have adverse consequences with respect to the value of the dollar and liquidity issues. i think that was a positive change. i appreciate the extraordinary effort you and your staff have gone to to include the rest of us in these changes. i want to thank you for that. >> well, thank you senator conrad. you are exactly by that it gives us the opportunity to ensure that there are none of those unintended consequences. i feel good that as we deal with the second largest swap market of over 56 trillion dollars, that we take the necessary steps that need to be taken, but give ourselves the opportunity to ensure that there are not any unintended consequences. >> if i may also add, i appreciate the ranking member. we have an unusual situation here. regarding how productive the rela

to the cftc or the sec. 100% of it. >> i understand that 100%. addition to any dispute about that or any misunderstanding. >> i'm not talking about the reported that a document clearing and trading. >> you're not going to clear end users under the chairman's mark. don't be mistaken about that. >> i think the point is if we're going to keep working on this and to pie charts and this that and the other, and consider red and blue and the difference is why don't we work with the bipartisan bill that we started six months ago on and use that as the base bill and go ahead with all these other concerns? i don't get it. >> as i mentioned before we can surely continue to work on these, but everyone -- i have put forward a mark that i feel is the storms and the most necessary in terms of circumstances that we are dealing with. as i said the minor disgrace that we had still exist and we work through us as we work to the floor. >> i think the senator from iowa raise a good point. i think it should come from all those to look at these three charts here to get

would have allowed the cftc to impose aggregate position limits. and most importantly, it would have provided the much-needed transparency that has been absent from the swaps market. this would have represented a $1a 180-degree shift from currew that was in place in 2008. transparency, mr. president, is the key here, and under our agreed-upon discussion draft, 100% of all trades in the swaps and derivatives market would have been out in the open and available for regulators to view in realtime. unfortunately, this legislation is not part of the underlying bill and instead we are faced with a derivatives product crafted without input from republicans. a derivatives product that reflects an agreement between two democratic committee chairmen and the administration. republicans were not even invited into the room to provide input. the product they have developed will have many unfortunate consequences for main street businesses that has nothing to do with creating this financial meltdown. i fear what i believe to be unintended consequences resulted fr

and cftc, having been nominated in this post by presidents of both political parties, i cannot think of any instance where politics was a consideration in bringing an enforcement action, nor should it ever be." she notes that regulatory reform has been on the agenda for a year and they brought a lot of enforcement cases since then and suggesting here that the timing is purely coincidental. very interesting, guys. >> all right. scott cohn, thank you very much. of course we'll remain on the after-hours action, but we do want to go to this goldman story because it is interesting that she would even borlth -- >> yeah. i'm going to -- >> why bother to say that it's a coincidence? >> i'm going to raise my hand here. >> whoever denies -- i won't say it. >> you do not have to come out and -- >> right. >> -- say this. >> credit defend yourself if it's not even grounded? >> because you know what? they know, i'm telling you they know there's going to be some discovery here in the litigation process that's going to be conversation, there's going to be e-mails so, they're trying to get in front o

for the first time the cftc will be able to prevent speculators from assembling massive positions in a particular commodity such as oil by assembling large positions in multiple contracts. see how they do that. traders can now simply buy positions on brent crude oil when they exceeded limits in west texas immediate crude oil. and that makes no sense. see, it's a way to be hidden in the size of your trade. aggregate position limits will prevent manipulative practices such as though deployed by the defuncted hedge fund amaranth in 2007 which assembled massive positions on two separate natural gas contracts and manipulated one in order to profit on the other. and let there be no doubt about this, amaranth settled, paid a huge fine in substantial millions of dollars. further, the fund will close the london loophole so they can't just go around american law by requiring the foreign board of trades adhere at minimum standards comparable to those in the united states and reporting all trading activities to united states regulators on a timely basis. finally, and perhaps most importantly, th

no requirements to keep records, no large trader reporting, which would have been things that the cftcould have said i can look at that and see whether manipulation is happening. you had no speculation limits. another thing that happens on the stock markets or on trades that happen now -- i mean we hear about it all the time -- is that if somebody thinks that somebody is messing around with the market, you can have limits. you can come in and, on an exchange or an agency can come in and say we're going to stop that kind of trading because we have concerns about what's going on. and we also know that there was no capital behind these bets as well, which, you know, is very alarming to a lot of people that, you know, the synthetic c.d.o.'s were cooked up and had no capital behind them. and i know my colleague, senator dorgan, has been out on the floor and talking about legislation, an amendment he's going to be offering on the senate floor to make sure that we close that. but what it created was just a high risk for fraud and manipulation and excessive speculation. that's what happened. t

add to that the cftc data that showed that money managers increased, rather decreased their net loan positions by about 6% in the week ending last tuesday. so, that was setting up for oil prices to be lower even before the goldman sachs news. we're also keeping our eye on jet fuel demand, and of course, heating oil and gas oil as a proxy for that. but barclays says only expect about a million-barrel-per-day disruption to the jet fuel demand due to the airline disruptions that we're seeing in europe. mark, back to you. >> all right. thank you very much. shares of goldman sachs continue to get hit following the s.e.c. fraud allegations on friday. will the so-called wall street darling be able to repair its image? and if so, how long will it take to recover from this mess? well, let's ask josh rosner, managing director of graham fisher and company. jesse eisinger is senior reporter at pro public ka. and former "wall street journal" edition of the portfolio. josh, i'll start with you. how is this going to play out for goldman? >> well, i have a feeling that we're going to end up seeing t

cftc did nothing. he told them again before hand when they would do it, how they would do it, and how much. his name was andrew mcguire, and a major media reported this. "the new york post" was the only one reported any of it and this is bigger then worldcom and many others. in the reporting from mainstream media about this? the story was last week. he was scheduled to testify in the hearing on march 26th and the canceled his invitation. it is just amazing that even have something that big and the battle comes down to the legality or illegality of having these huge, short contest on these commodities. i believe that the etf funds are basically taking people's money and then joining the products. but that is just my opinion. host: thanks. for the earlier caller, there are some who tried to get through try to denigrate what we're trying to do -- we apologize when profanities' tried to get in and we try to monitor closely. from this paper, hold the vat. taxpayers may prefer spending cuts. the president sa

guest: she was the former head of the cftc. in the late 1990's, she was part of the president's working group, and she was pushing and then while day, saying that they needed to regulate derivatives. it did not get very far within treasury. certainly, when it went in front of the banking committee, and then chaired by phil gramm, they did not have much appetite for it. that idea was essentially pushed aside. now she can take her victory lap. host: more on this from twitter -- does the president have any influence in shutting her down directly? guest: i think it was more the administration itself. alan greenspan had no interest in regulating derivatives. he was a hard hurdle to get beyond in the debate. host: louise story, an answer to my question of any one person that you would like to interview? guest: yes, i would like to know how much money goldman sachs made from the mortgages, negative betts. they have spoken about the money that they have lost. in 2008, they took a $1.7 billion writedown on their mortgage investments and

guest: she was the former head of the cftc.in the late 1990's, she was part of the president's working group, and she was pushing and then while day, saying that they needed to regulate derivatives. it did not get very far within treasury. certainly, when it went in front of the banking committee, and then chaired by phil gramm, they did not have much appetite for it. that idea was essentially pushed aside. now she can take her victory lap. host: more on this from twitter -- does the president have any influence in shutting her down directly? guest: i think it was more the administration itself. alan greenspan had no interest in regulating derivatives. he was a hard hurdle to get beyond in the debate. host: louise story, an answer to my question of any one person that you would like to interview? guest: yes, i would like to know how much money goldman sachs made from the mortgages, negative betts. they have spoken about the money that they have lost. in 2008, they took a $1.7 billion writedown on their mortgage investments and

so she leaves the cftc and immediately they come a-calling again and this time congress passes the bill that becomes law that says, congress is prohibited -- buble this? congress is prohibited from regulating derivatives. still not enough. then in 2004, it became obvious that europe was getting a little nervous and they basically said, if these bank holding companies weren't going to be regulated by their countries, then they would be subject to european regulations. well, our investment banks wanted none of that. so this time they came to the s.e.c. and by regulation, the s.e.c. passed on their own accord, not with congressional support or evaluation, a voluntary regulation to which all the investment banks would be subject for regulation purposes called the c.s.e. the consolidated supervise entities program. besides giving them the benefit of having a regulator here in the united states so they wouldn't be subject to more scrutiny in europe, it also did something that was quite frightening when we look back on it. it lifted the leverage cap that was 12 to one, it didn't lift to it 15

later, as a senate hearing on the annual budgets of the securities and exchange commission and cftc. the head of both the natural regulatory agencies will testify. live coverage at 2:30 eastern. >> sunday, a television analyst, author, and three-time presidential candidate pat buchanan on conservative i ideology. three hours with pat buchanan. sunday at noon eastern. host: california republican darrell issa is here to talk about the oversight of the securities and exchange commission, which is at the heart of the discussion. the suit that the sec filed against the firm. in general, what do you think about the job that the sec is doing? guest: this was one of the most unforgettable political move that the sec could have made. goldman sachs how things had they have a legitimate defense and believe they will prevail in court. having said that, the sec, released in the middle of the day this information. it is the largest suit in history, so by definition, the most controversial one to release in the middle of the day. they did it on the same day that there inspector general released rep

and the regulators -- s.e.c., cftc -- will have direct access to controlling and making sure that thattal is adequate in the clearinghouses and making sure that the clearinghouses are adequately monitoring the contracts. and then as the contracts become more standardized -- and they will and they can, we all accept that -- they move over to exchanges, where they're basically traded like stock and then you've taken -- then you have absolute transparency, price disclosure and you -- you don't have the issue -- issues of the over-the-counter market that caused so much problems for us. and that will happen. that will happen almost naturally, but you could have the regulator stand up and say, well, we think this group of derivatives is standardized enough and you've got to move it to an exchange. we could give that power to the regulators. that makes sense. but it would happen naturally anyway as we moved on to -- as these clearinghouses become more effective and standardizing the products and people become more comfortable with standardized products in these areas. and, of course, there wo

and the regulators -- s.e.c., cftc -- will have direct access to controlling and making sure that that capital is adequate in the clearinghouses and making sure that the clearinghouses are adequately monitoring the contracts. and then as the contracts become more standardized -- and they will and they can, we all accept that -- they move over to exchanges, where they're basically traded like stock and then you've taken -- then you have absolute transparency, price disclosure and you -- you don't have the issue -- issues of the over-the-counter market that caused so much problems for us. and that will happen. that will happen almost naturally, but you could have the regulator stand up and say, well, we think this group of derivatives is standardized enough and you've got to move it to an exchange. we could give that power to the regulators. that makes sense. but it would happen naturally anyway as we moved on to -- as these clearinghouses become more effective and standardizing the products and people become more comfortable with standardized products in these areas. and, of course, the

and the regulators -- s.e.c., cftc -- will have direct access to controlling and making sure that thattracts. and then as the contracts become more standardized -- and they will and they can, we all accept that -- they move over to exchanges, where they're basically traded like stock and then you've taken -- then you have absolute transparency, price disclosure and you -- you don't have the issue -- issues of the over-the-counter market that caused so much problems for us. and that will happen. that will happen almost naturally, but you could have the regulator stand up and say, well, we think this group of derivatives is standardized enough and you've got to move it to an exchange. we could give that power to the regulators. that makes sense. but it would happen naturally anyway as we moved on to -- as these clearinghouses become more effective and standardizing the products and people become more comfortable with standardized products in these areas. and, of course, there would have to be realtime disclosure to the regulators of what the prices were if they are o.t.c. prices or clear

and the cftc and others who are engaged in financial regulation said you know what? we're engaged in light touch. in fact, we're engaged in no touch. we will be blind for years. we won't even look. we're regulators, but we intend to get paid, we don't care what you do. that's the ultimate light touch, but i have had a belly full of that. i want regulators to regulate effectively to make sure the market remains open and free and fair. that's the job of a regulator. that's the job of the f.c.c. we're going to have a big debate about this in the congress, but first and foremost, i hope the federal communications commission takes actions under its own authority, because it has plenty of authority to respond to this decision. it has authority under title 2 and it has other authorities it can use, and i would encourage it to proceed. and i hope that's the case. second, senator snowe and i and others on a bipartisan basis will continue to press the congress here to enact net neutrality or what i call internet freedom legislation, because if the f.c.c. doesn't do it, let's m