Good Morning, Everyone. We have gray skies and thunderstorm warnings out for today. I will be doing minimal work in the gardens. Actually, the whole container gardening set up requires minimal work. I don't have many weeds and they are easily pulled. I still have those damned mushrooms but that is under control. Unlike last year when I could barely keep ahead of the cabbage worms, I haven't seen one so far this year. When I looked out from the patio door I saw the first gypsy pepper. It seemed to have sprung up over night.

Thanks for the compliment on the blog make over, Kay. It was time to change it up a bit. Enjoy your trip.

I have been hearing intermittently about the financial regulation legislation packages making their slow passages through the Congress and Senate. Mostly, the stories come up on the financial news stations like CNBC. When the stories come up the thrust of the questions are how badly the legislation will cripple the industry under discussion. I have had the feeling for some time that nothing much will change in any significant way. These two stories from HuffingtonPost strengthen my cynical view of this whole process. The first story I saw this morning proclaimed the victory of the nation's auto dealers over proposals to include them under the authority of the proposed consumer protection bureau. If anyone can read this story and tell me where the authority to regulate this industry and protect consumers lies, please comment and explain it.

"Under a compromise offered by Senate Democrats Tuesday, auto dealers would still be covered by federal truth-in-lending rules that would have to conform to regulations adopted by the consumer agency.

The Federal Reserve, which oversees truth-in-lending regulations, could adopt different rules but would have to explain its decision. At the same time, the Federal Trade Commission would be given authority to write new rules for auto dealers under accelerated procedures.

But the bottom line would be that auto dealers would be exempt from direct supervision by the consumer financial protection bureau. The exclusion would not apply to auto dealers that provide their own financing, such as Carmax, or to giant auto lender GMAC."

By my reading, dealers are still subject to truth-in-lending rules but at least three different agencies have some degree of authority and can issue conflicting rules.

Then I found this piece. According to the author, Senator Tim Johnson (an alleged Democrat from South Dakota) has proposed an amendment that "undercuts a move to compel brokers -- middlemen between buyers and sellers of securities -- to act in the best interests of their clients, in accordance with what is known as their fiduciary duty."

One of the major problems that emerged from the hearings into the financial meltdown concerned the practice of Goldman Sachs agents constructing CDO packages to meet the demands of one of their clients and then selling them to others without telling the buyers all of the details. Little details like the fact that the packages were designed to fail and that the original client (and Goldman itself) were shorting the packages. The question that arose is who exactly are the clients to whom Goldman owed a fiduciary duty? And, unfortunately, the legislation does not really address that crucial issue. If you want a mind-boggling description of how this mess worked, read Michael Lewis' "The Big Short." Goldman was in a contradictory position of being the originator of the securities and the marketer of those same securities. They could not fulfill their fiduciary duty to both sets of clients at the same time.

Then there was the ruling by the Federal Judge in Louisiana that decided that the moratorium on deepwater drilling was unjustifiable and over broad. This story indicates that the judge may have had his own financial motives for his ruling--substantial investments in Haliburton and Transocean. I find some of his questions troubling. ""If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing,” Feldman wrote." The Exxon Valdez incident resulted in regulations which banned the single hulled tanker of its type and pushed the industry to switch to double hulls. Airlines have been subjected to sweeping inspections that shut down large parts of the industry for a time because one plane failed. If the piece of drilling equipment is a crucial as they say the blow-out protector is flawed then they may have a systemic problem. As I understand the reports to date, at least TWO of those pieces of drilling equipment proved faulty. So, if 100 cars have a problem with their accelerators we shouldn't recall all of the cars of that type because we can't tell if they are ALL faulty?? Or did Judge Martin Feldman simply not have any investments in the auto industry? Or Toyota simply did not shop in the right judicial market? ( I should be fair here. The judge may have sold his shares in oil related stocks. No one knows because the financial disclosures were for 2008 and that is the last year for which such disclosure is available. If he does still own the stock he should have recused himself because of a conflict of interest. If he does not, he should indicate that publicly.)

Michael Klar has a post at Tomdispatch this morning that should give anyone pause who thinks like Martin Feldman does--that simply because one airplane or car, or one piece of drilling equipment fails that we have no reason to worry about the others. Klar provides several scenarios which are slight extensions of events that have already taken place. Three did not result in any environmental disaster but the fourth is an ongoing catastrophe. I linked to one of the several stories about Nigeria and the situation on the Niger Delta a few days ago. For the last 30 or so years, the inhabitants have suffered the equivalent of an Exxon Valdez spill every day. It doesn't take an over active imagination to conceive of an equivalent disaster in the Gulf where we have an Exxon Valdez every four days.

I have noticed an amusing and irritating side debate surrounding the BP spill--where exactly on the all time worst disasters should the spill be ranked. I am amused because of the insatiable desire we seem to have to rank things, to be first. Everything has to be put on a list in order of importance according to whatever criterion we choose. But I am also irritated because of the implications involved in being ONLY number two or three on the list. Do we scale back our efforts and expenditures because it is ONLY ranked two or three or whatever? Do we just let things go on hoping it will someday be ranked higher? There seems to be an effort to denigrate the disaster and that is a mistake.