Cap and Trade: Credit Default Swaps Part Two!!!

Today in the Washington Post David Sokol wrote about how we are being gamed by the government. Read the whole article here. Here is the juicy part:

If you liked what credit default swaps did to our economy, you’re going to love cap-and-trade. Just read Title VIII of the bill, which lets investment banks, hedge funds and other speculators participate in the cap-and-trade market. They don’t have emissions to cut; they have commissions to make.

Now, I am up for making money no matter what the market does, but I would prefer good versus evil. Credit Default Swaps (CDS) never made much sense to me because it allowed people to buy insurance on stuff they didn’t own. Now, you may say that buying a put option on a stock you don’t own is the same thing, but put options cause a companies ability to issue debt to blow up. Options are also regulated and despite the pits of traders you see on TV, they are ‘orderly’. After all, we keep them in a pit!

Cap and trade will do nothing but give hedge funds and investment banking houses the ability to speculate on a new ‘green’ world while driving up prices to the consumer and killing off industrial companies. In the end, I really don’t look forward to making money off these side bets as they blow up entire industries. Maybe the bill won’t pass. . .