Calling CME's Existence Into Question

Via nc links, Jesse's Cafe Americain publishes an open letter from Warren Pollock to the CME.  Here is my favorite part:

Worse yet, our “innovative” financial system impedes the effectiveness of the greater “physical economy.” The “physical economy,” consisting of all those individuals and entities tasked with meeting actual need. The "physical economy" consists of many of your customers including farmers, manufactures and electric companies.

Our society needs people working in the "physical world" to create jobs more desperately than it needs the continuity of the CME. Must we endure another market catastrophe to figure this out?

The 2008 bailouts defined “moral hazard,” as the socialization of losses due to over-leverage. MF Global consumers are currently subsidizing losses attributable to over-leverage and “innovation.” Perhaps, small percentage moves in speculation rationalized an internal choice between corporate survival and the sanctity of customer funds. Complexity has been specifically designed, by “modern finance” to intentionally allow over-leverage leading to out sized profits and reactively-subsidized losses.

The word, “theft,” comes to mind.

I believe that, the products traded by your member firms, at the CME exchange and elsewhere, well exceed the capacity of the monetary system to cover relatively small percentage losses or speculative miscalculations. Clearing OTC derivatives on an exchange does not, and will not, correct the problem.

Putting the "physical economy" back ahead of the financial system is well overdue.  Making things is more important than creating money.  Conservatives can attack the Federal Reserve for printing money, but they've been allowing the shadow banking system, and the TBTF banks which operate the system, to create money out of thin air.  Too much of what they create gets stuffed in the bankers' pockets, while the rest disappears again when their leverage pyramids collapse.