EconomicCrisis.US

The Obama administration scored its first financial regulation reform victory in months on Thursday when a U.S. congressional committee approved new rules for over-the-counter derivatives.

In a 43-26 decision, the House of Representatives Financial Services Committee voted in favor of slapping new rules on the largely unpoliced $450-trillion OTC derivatives market, widely blamed for amplifying last year’s financial crisis.

The committee’s bill strives to balance a desire to curb speculative market excess with preserving the market’s useful role in helping corporations hedge against operational risks.
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U.S. officials must figure out what to do about an economy that is growing yet not generating enough jobs before they can shift their focus to dismantling their multi-trillion-dollar rescue programs.

Two deadlines are looming.

The first is the $12.1 trillion federal debt limit, which will soon be reached unless Congress agrees to lift it.

The second is the 2010 election season, when most members of Congress will be out on the campaign trail. If unemployment is still near 10 percent, as many forecasters predict, that will not sit well with voters.
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Nearly two years to the day after U.S. stocks peaked and began their harrowing plunge, the dollar has finally fallen victim to its own bear market.

Since March, the greenback has dropped about 15% against a basket of major currencies.

That’s a big enough fall to raise questions about why it’s happening, what comes next and how investors might get in on the action.

As with stocks, bonds and pork bellies, there are bull and bear cycles of varying lengths in the currency markets, though such trends are generally mild compared with those in equities and commodities. But numerous factors account for the recent weakness in the dollar, including:
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It’s the biggest mystery in global finance right now: Who conducted a sneak attack on the U.S. dollar this week?

It began with a thinly sourced but highly explosive report Monday in a British newspaper: Arab oil sheiks are conspiring with the Russians and Chinese to quit using the dollar to set the value of oil trades — a direct threat to the global supremacy of the greenback.

Is it true? Everyone from the head of the Saudi central bank to U.S. officials scrambled to undercut the story, but no matter.

With the U.S. economy on the ropes and America by far the world’s biggest debtor, investors aren’t feeling as secure about the dollar as they used to. And the notion of second-tier economies ganging up on Uncle Sam didn’t sound so far-fetched.
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