McCain Wants to Rearrange the Deck Chairs on the Titanic to Save It.

While visions of sugar plums were dancing about in everyone's head, in the dark of night, December 21, 2000, Senator Phil "We have become a nation of whiners" Gramm, a.k.a., McCain's econ brain, and congress, passed the Commodities Futures Modernization Act (CFMA), a.k.a., the Enron Loophole (McCain defended in May 2008). This act completely deregulated the $62 trillion credit derivatives market, not only at the federal level but at the state level as well. Gramm's bill provided the key that unlocked the Pandora's box of greed, stupidity, and chaos that would serve to "collapse" the American economy.

The Federal Reserve was chartered - Federal Reserve Act of 1913 -- December 23, 1913 in the wee hours of the morning. The week before Christmas, a popular time of year to sneak corrupt legislation in, really needs it's own regulatory act.

$62 trillion is the estimated worth of the credit derivatives market. It is this so-called "worth" that is at the crux of this financial meltdown, because the value has never been tested by economic reality. It's solely based on promises made on money that wasn't there to begin with.

This dark financial market -- a market, to put it simply, that involves private contracts, where one side bets it will go up and the counter party bets it will go down, the counter party charging a hefty fee for placing the "bet" -- has become the predominant method of transacting business in our economy, yet it exists completely outside of the law and realm of regulation, thanks to an ongoing crusade since the 1980s to "free" the market from the feds.

Yes, these hedgefund managers, and the like, work hard and take risks for their annual $3 billion salaries -- OK, only a few make that much...the rest only make $500 million -- but then again, so do sophisticated cat burglers and people involved in organized crime.

More money is invested in this market and its derivative products than in regulated stocks and bonds, combined. Credit default swaps, the "star" complex financial instrument, are nothing more than insurance policies taken out on the bets made inside the credit derivative market serving to insure billions and billions of dollars. This is what the banks used to protect the value of the billions of bets they made on people paying mortgages they could not afford to pay. The banks and insurance companies, made these "bets" through off-book structured-investment vehicles which the federal government permits.

So, why would anyone bet that people will make their mortgage payments, who can't document their assets because they don't exist, and who clearly cannot afford to make their mortgage payments? Well, one of the reasons is that they assumed that housing prices would continue to rise and the other reasons can be summed up in two words, greed and stupidity.

Then, these "geniuses" added the "value" of these bets to their books. The problem was/is that no one knew what the real value was or is because the "value" could not withstand accounting procedures because there was/is no real monetary or material worth. There was/is no system of accounting required, no capital reserve, no central registry of transactions...the value was/is manufactured out of thin air.

The credit agencies who are paid by the people who own these financial instruments rate them AAA, further adding to this deception we call our economy.

Who's going to "fix" this problem?

Well, if you think, if you think rearranging the deck chairs on the Titanic will save it, than vote for McCain of if you think hiring faster people to chase after the horses after they've escaped from the barn, rather than installing a door to prevent their escape, is the better option, than by all means, vote for McCain.

That's according to Law professor Michael Greenberger, at University of Maryland School of Law, and the director of the University's Center for Health and Homeland Security. Greenberger worked with Robert Rubin, former secretary of the treasury during the Clinton Administration. He is now one of Obama's two top economic advisers. Greenburger said Rubin clearly sees the source of the current market meltdown, and that is the deregulation of the credit derivatives market, something he failed to see when working for Clinton, unfortunately.

Changing the organization chart - "rearranging the deck chairs on the Titanic" - as John McCain wants to do will do nothing more than make the bailing out process easier for the Federal Reserve, thus more expensive for us regular taxpayers.

Obama wants to make these complex financial products transparent. He wants to know where they are, who has them, what the real value is, adequate capital reserve, margin requirements, and auditing procedures to make sure these things can withstand economic reality.

Completely outside of the law...completely unregulated...the credit derivatives market is the biggest game of smoke and mirrors in the history of the American economy.