Date: May 20 2012
IT WOULD be a tragedy if Barack Obama lost the US presidential election because of his support for gay marriage.
The issue is a trivial one - a piece of paper - that has been blown out of all proportion by both sides.
When I previously wrote on this subject, a correspondent replied that I was denying him his ''right to love''. Nothing of the sort. He can love whoever he wants. Grandparents love their grandchildren and don't demand a licence to testify to it.
Don't get me wrong. I'm not opposed to gay marriage. I just don't care whether gays can marry or not - a view probably shared by most in the community.
And before someone points to a poll and writes that Obama is more likely to win the election because of his stance, let me draw attention to an article in last week's Washington Post. It reported the Gallup poll showing 51 per cent of Americans supporting gay marriage. But a CBS News/New York Times poll found only 38 per cent support. The difference was that Gallup gave voters just two options - support or oppose - while the CBS/NYT poll added a third, civil unions, which got 24 per cent. Another 33 per cent opposed both marriage and civil unions.
Politicians are concerned about the voters who see the gay marriage issue as a prime factor determining their vote. In the United States it has to be noted that so far the anti-gay marriage people have managed to get 32 states to pass legislation banning gay marriage. It is a worry for Obama's campaign if the activists in the swing states are more likely to be people opposed to gay marriage.
On the other side, Hollywood stars mostly support Obama's stand and have donated generously, partly because of this.
Australia differs markedly from the United States. Thankfully, they got the Pilgrims and we got the convicts. As a result, we do not have the same religious fanaticism.
Polls in Australia show sharp divisions from one electorate to another on gay marriage. In Adam Bandt's inner-city electorate of Melbourne, there is strong support, but in the Queensland electorate of Capricornia, strong opposition.
If everyone were not so hung up on state recognition of marriage, there would not be a problem. If, for example, a gay couple wanted to be seen by their community as ''married'', they could conduct a ceremony with friends and family announcing their lifelong commitment. Similarly, religious people could decide that the only ''marriage'' they recognised was one conducted by their church, synagogue, mosque or temple.
The state licence wouldn't be a ''marriage'' licence. It would be a civil union licence, perhaps only required where a couple wanted recognition of their responsibility for children.
T HE $2-3 billion loss incurred by J. P. Morgan Chase in a derivatives manoeuvre is further proof - if any more is needed - that the financial market whiz kids frequently do not know what they are doing.
When they make money they are hailed and paid huge bonuses. But when they lose, the surviving financiers claim the loser was a ''rogue trader''.
It is becoming increasingly clear that the products the investment banks are trading - variously described as derivatives, credit default swaps, complex financial instruments and collateralised debt obligations - are poorly understood, even by those who deal in them. When they try to explain and say it is ''complex'', they really mean, ''I don't understand it myself.''
Repeatedly we have seen institutions come up with ''clever'' strategies to trade in these instruments, only to find reality upsetting their market.
Long Term Capital Management pioneered in this field, with its two mathematicians and economics Nobel Prize winning board members, Robert C. Merton and Myron S. Scholes, developing a brilliant new way to determine the value of derivatives. It was great until the 1997 and 1998 east Asian and Russian crises, when the company lost $4.6 billion in four months.
Before that we had Nick Leeson, the derivatives broker whose trading in 1995 caused the collapse of Britain's oldest investment bank, Barings.
The year 2008, was, of course, the ultimate in free financial market stupidity. Cutting-and-dicing and swapping of mortgage loans, and trading in these derivatives, most noticeably brought down Bear Stearns and Lehman Brothers in the United States. In the same year, France's Societe Generale lost 4.9 billion euro on derivatives trading, blamed on - you've guessed it - a rogue trader, Jerome Kerviel. Last in this partial list, there was the September 2011 announcement by Swiss bank UBS of a $2 billion loss as a result of unauthorised trading performed by Kweku Adoboli, a director of the bank's Global Synthetic Equities Trading team.
Clearly there is need for greater regulation of this market. A worldwide financial transactions tax should be introduced to ensure that the community gets something out of mass trades that are really unproductive gambling operations. One apologist for the industry in effect confirmed this last week when he said that J.P. Morgan's loss was someone else's gain - a zero-sum game.
J.P. Morgan is one of the largest housing mortgage providers in the United States. The $2 billion it lost would have gone a long way if it had been used to help those who were refused loan modification and consequently suffered foreclosure.
It is a pity that some years back we lost the distinction between the deposit-taking traditional commercial banks and the gambling investment banks. It is probably too late to unscramble that egg. All we can hope for is tight regulation, and regulators with the capability and confidence to act.
J.P. Morgan chief executive Jamie Dimon was one of the leading opponents of bank regulation. The good news is that this debacle has reduced his influence.
This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.
[ Canberra Times | Text-only index]