Derivatives

As I write, our nation is still buzzing about the news flash that finally delivered the truth about why our economy melted down without word one from our crack government regulators. You know what I'm talking about. Yes, it's the great SEC porn scandal. Last week, a new memo surfaced from the Securities and Exchange Commission's inspector general stating it had investigated dozens of agency staffers, including supervisors, for surfing the Web for dirty pictures with their government computers and during work hours.

Democrats and Republicans in the Senate are getting closer to striking a deal on a proposed overhaul of financial regulation, increasing the likelihood that a bill will become law this year. That's the good news. Still in doubt, though, is how well lawmakers have learned the lessons of the Wall Street meltdown that sent the economy reeling in 2008. The Republicans' rhetoric suggests that they cling to a revisionist view of that recent history, or that they remain in denial about the fundamental failure of the market to protect itself against the financial industry's worst instincts.

As President Obama heads to New York City on Thursday to press for a major overhaul of financial rules, he faces stiff opposition by Wall Street to the toughest proposed regulatory crackdown since the Great Depression. A Senate committee on Wednesday approved the final piece of the sweeping legislation — strict new oversight of the murky and unregulated market for complex financial derivatives. It is one of three significant provisions that rile Wall Street the most. Also drawing fire from large financial firms and business groups is a proposed agency to protect consumers in the financial marketplace and a $50-billion fund, paid for in advance by the industry, to help cover the government's costs should it need to seize and dismantle a large financial firm because its impending failure would threaten the economy.

Reform plan Highlights of Sen. Christopher J. Dodd's financial regulatory overhaul proposal: Creates an autonomous consumer protection bureau within the Federal Reserve Grants the government power to seize and dismantle large firms if they're near collapse Establishes a council of regulators to monitor the economy for signs of major risks Adds new regulations for hedge funds and derivatives markets ...

One pill makes you larger and one pill makes you small, and the pills Tim Burton gives you don't do very much at all. With apologies to Jefferson Airplane's "White Rabbit," that more or less sums up "Alice in Wonderland," the director's middling new version of the Lewis Carroll tale. It has its successful moments but it's surprisingly inert overall, more like a Burton derivative than something he actually did himself. Through no fault of its own, "Alice" also has the misfortune of being the first major 3-D release to come out after the "Avatar" revolution, and when you add in that Burton chose to shoot in 2-D and have the footage converted, it inevitably plays like one of the last gasps of the old-fashioned ways of doing things.

Conservative televangelist Rev. Pat Robertson on Wednesday linked the earthquake in Haiti to a "pact with the devil" purportedly entered into by the Haitian people in the late 18th century in a bid to defeat French colonizers. "Something happened a long time ago in Haiti, and people might not want to talk about it," Robertson said on his Christian Broadcasting Network show. "They were under the heel of the French . . . and they got together and swore a pact to the devil. They said, 'We will serve you if you'll get us free from the French.

The dark and largely unregulated market of derivatives, which helped trigger the financial crisis, moved closer to federal oversight as a congressional committee voted to impose new rules on the products to try to limit the risk they can pose to the economy. The 43-26 vote by the House Financial Services Committee was a key step for the Obama administration's plan to overhaul Washington's oversight of the financial system while shedding more light on complex investments. Immediately after the vote Thursday, the committee took up the most contentious issue in the regulatory package: creation of the Consumer Financial Protection Agency.

Goldman Sachs Group's famously gold-plated bonuses are coming with a little something extra this year: unwanted scrutiny from the government. Just a few weeks after reporting record quarterly profit and a bonus kitty of more than $11 billion, Goldman revealed in a government filing that "various governmental agencies" were looking into how the firm gave out compensation. The company declined to reveal Wednesday which agencies were examining its pay practices and wouldn't provide details.