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Mike Aguirre, who leaves the city attorney's position Monday (Dec. 7), is preparing a white paper on the multi-trillion derivatives market. The paper may come out later this week. In essence, it sketches how financial institutions' gambling with derivatives has put the entire global financial apparatus in grave peril. Aguirre tells how Franklin Delano Roosevelt, faced with massive bank failures in the early 1930s, declared that there "must be an end to speculation with other people's money." Legislation such as the 1933 Glass-Steagall Act was created for this purpose. But in 1999, the act was repealed, and, predictably, an orgy of unregulated gambling with borrowed funds swept over the world, with the U.S. as the center of the cancerous activity. Now the face value of derivatives is a quadrillion dollars, and credit default swaps, the unregulated derivatives that supposedly guarantee debt instruments, have created the possibility of a financial nuclear reaction -- one failure bringing down other institutions all over the world. This is why the U.S. has been bailing out such malefactors as Bear Stearns, AIG, Citigroup and the like. Along with others, Aguirre favors repeal of the 1999 repeal of Glass-Steagall; registration of collateralized derivatives as securities; registration of hedge funds and hedge fund advisers; regulation of credit default swaps under state insurance laws, and prohibition of credit default swap speculation. Aguirre is perturbed that some of the financial doubledomes who favored repeal of Glass-Steagall are counseling the Obama administration. Aguirre is forming a new law firm on C Street with two former city attorney colleagues to pursue litigation in this area. The two partners will be Maria Severson, former head of the civil division, and Chris Morris, former head of the criminal division.

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Comments

SanDiegan Dec. 9, 2008 @ 1:36 p.m.

Don't think I'll need his "derivatives" expertise, but if his firm does other stuff I sure as heck would call on them for legal needs and I think many of your readers will do likewise since he like you Don are straight honest shooters. What a shame the Lincoln Club and the Republican builders, business as usual and sports cartels were successful in getting "CaseyII" Elected.....we're in for a really bad time with that puppet of the establishment as City Attorney: New Stadium for the Spanos Cartel via City $$$$$$on the way.

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Don Bauder Dec. 9, 2008 @ 2:12 p.m.

Response to post #1: At yesterday's swearing-in ceremonies, Goldsmith criticized Aguirre for being "incompetent, vindictive and unprofessional," according to the Union-Tribune. Goldsmith apparently slammed Aguirre for "ethical breaches." Aguirre, who was not there, refused to criticize Goldsmith. When he had been sworn in four years earlier, Aguirre had praised his predecessor, Casey Gwinn. Your criticisms of Goldsmith are right on the mark: he is a political hack in the pocket of the Lincoln Club, Republican establishment, AND the municipal labor unions -- all of whom are San Diego's worst enemies. Goldsmith's rein will be a very, very interesting one. Aguirre will have the last laugh. Best, Don Bauder

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SanDiegan Dec. 9, 2008 @ 4:05 p.m.

Ah good...fumber has floated to the top again....

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Don Bauder Dec. 9, 2008 @ 8:13 p.m.

Response to post #3: Fumber would make a good deputy for Goldsmith. They think alike. Best, Don Bauder

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Don Bauder Dec. 9, 2008 @ 8:14 p.m.

Response to post #4: Floated to the top of what? Best, Don Bauder

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SanDiegan Dec. 10, 2008 @ 12:13 p.m.

Response to Don #6: Toilet bowl was my perspective.

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Don Bauder Dec. 10, 2008 @ 12:43 p.m.

Response to post #7: Given his past pronouncements and his proclivities, fumber might like that. Best, Don Bauder

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SanDiegan Dec. 10, 2008 @ 1:20 p.m.

Response to Don #8 We do aim to please, Best

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OttoB Dec. 10, 2008 @ 7:44 p.m.

In my opinion, the Aguirre 'haters' have absolutely missed the moral of the story. I'd ALWAYS rather have a conscience wielding, maybe sometimes bumbling, but EVER FAITHFUL 'servant' like Aguirre than a money, power and politically motivated 'crash test dummy' like Sanders or Goldsmith, where the propensity for immoral, corrupt and underhanded dealings is not just a possibility, but an inevitability.

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Don Bauder Dec. 10, 2008 @ 9:06 p.m.

Response to post #9: Your excellent aim won't please one person -- if there is such a person. Best, Don Bauder

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Don Bauder Dec. 10, 2008 @ 9:09 p.m.

Response to post #7: Poster San Diegan regularly hits the mark. Best, Don Bauder

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Don Bauder Dec. 10, 2008 @ 9:11 p.m.

Response to post #11: Well said. The Aguirre haters I know are generally members of the corrupt establishment, or corpulent city unions, or enablers of them. Best, Don Bauder

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