Obama wades into regulation of derivatives

Congress and the Obama administration are in the process of regulating everything that walks, talks,eats, and sleeps on Wall Street. The most recent uproar came earlier today when news began to leak out that the government may set up guidelines for compensation across a wide array of financial firms.

Now, Washington wants to regulate the derivatives market, which makes some sense. The trading in mortgage-backed securities and other exotic instruments has been blamed for everything from the collapse of the banks to the Johnstown Flood of 1889. Financial quants have developed hundreds of ways to bet on a range of instruments based on everything from equities to commodities to bonds.