It wasn't too difficult picking out the Fat Bastard in the crowd of Russian models, craven moochers and media mavens. Besides, Fat Bastard and I were both desperate for coffee and heading for the same empty urn.

(We'd both signed on for Kazakhstan's annual Eurasia Media Forum, a kind of Burning Man festival for Eastern oilgarchs and their media camp followers.)

Now, it is my policy never to mention an interlocutor's weight, nor question the legitimacy of their birth, given my own vulnerabilities. (A would-be groupie told me, "You could do a few sit-ups, you know." Yes, I know.)

But this particular Fat Bastard is asking for it. I had tried to put the belly of this beast out of my thoughts, but I still had a New York Times story folded in my pocket that begins:

ATHENS - As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.

Fat Bastard - or Theodoros Pangalos, leading member of the Panhellenic Socialist Party (PASOK), Greece's equivalent to Labour - thinks the little Greek kiddies should stop belly-aching. Pangalos, as you can see from the photo below, is not bent over with hunger pains. In fact, he looks more likely to be bent over with labour pains, but in truth he probably just can't bend over at all.

Pangalos is best known for blaming the working people of Greece for the horror and the hunger among the ruins of what was once Greece's economy. However, it is, of course, not his fault; until last year, and through the core of the crisis, he was just Greece's Deputy Prime Minister - why should he be held accountable for anything?

Pangalos reclining.

Pangalos leads the Fifth Column of Greeks calling to accept Germany's terms of economic surrender: austerity, meaning cuts in food allowances, in pensions, in jobs. As of this week, more than one in four Greeks (27 percent) are out of work.

While we hunted for caffeine, Fat Bastard told me that anyone who complains about the austerity diktat, "Is a fascist or a communist or a conspiracy theorist." He didn't tell me which of these three categories the 11-year-old kids complaining of hunger pains fell into.

Just for the record, Greeks who can get a job work 619 more hours per year (see table) than the average German (and way, way more than Britons or Americans, as well).

But in the world according to Pangalos, Merkel and poobahs of the media, Greece went to hell in a handbag because the entire nation suddenly turned into work-shirking grifters.

But there's another explanation for wrack and ruin: Greece is a crime scene. And its working people are not the perpetrators of the crime, they are the victims - scammed, defrauded, their national industries looted and their treasury drained by financial flim-flam.

In 2001, Greece dropped the drachma for the euro. The drachma was good enough for Aristotle and very good for tourism, Greece's main industry. But when sun-and-fun was re-priced in euros, tourists swam across the Adriatic for kofte meatballs priced in dirt-cheap Turkish lira. Pre-euro tourist visits to Greece outnumbered those to Turkey by millions; but by last year, it was the just the opposite, with two-thirds of tourists tanning in Turkey.

With its Treasury bleeding hard currency, the government of Minister Pangalos's PASOK joined together with the opposition in a complex international currency kiting operation to conceal the losses from the public and, most importantly, from the European Central Bank.

German chancellor Angela Merkel with Greek Prime Minister Antonis Samaris.

That's impossible in a recession - not to mention plain insane - as it requires cutting public spending when spending is needed most. The USA, China, Brazil, India - the nations that pulled the world from depression's brink - all ran deficits way over the nutty 3 percent cap. I asked finance wiz Nomi Prins to calculate America's debt-to-GDP ratio using euro rules, and she estimates that Obama's deficits are now way down from recession's peak - to 10.2 percent of GDP.

Greece, fearing expulsion from the euro loony bin, turned to Goldman Sachs. For a mere $400 million (£263 million) in fees, plus golden sacks of ill-gotten trading gain, the investment was willing to cook the nation's books via a complex set of derivatives transactions. [For the particulars of the derivatives con, see "How Goldman Sacked Greece".]

Since the con was busted open in 2009, the Greek public has had to pay cheated bondholders a premium to insure against default of the nation's debts. The credit default insurance costs an average of $14,000 (£9,218) per family per year.

When I was a racketeering investigator working with the US Justice Department, in the days when we pretended America still had justice, we would have called the derivatives trick a "fraud on the market." We'd handcuff the perpetrators, lock 'em up, or, at the least, make them cough up their purloined profits.

So, should Goldman pay up? Not according to Pangalos, because - in the worldview of our rulers - the victims of the scam are as guilty as the victimisers. Pangalos even put it into a famous (or infamous) motto: mazi-ta-fagame. That's Greek for "We all ate it together" (a sample of which was used in a Plastic Flowers song).

But the visible evidence suggests Pangalos, not Pantelis - the kid doubled over with stomach pain - ate all the pies.

The mass privatisation of public property at wiener schnitzel prices has German speculators dipping in their spoons as well, though the Federation of German industry is complaining about Greece's own "princes" gobbling up the assets.

I was going to invite Minister Pangalos to lunch to test his theories, but he left in a pachydermic huff when I asked him about Geir Haarde. Haarde, the former Prime Minister of Iceland, was found guilty of criminally concealing his knowledge of the trickery used by Iceland's banks before they melted that nation's finances.

I asked Fat Bastard, "Do you think you too should be in prison for" similar conduct in the Greek government?

Maybe that's why Minister Pangalos didn't want to go to lunch with me.
(c) 2013 Greg Palast is author of the New York Times bestseller, Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps, The Best Democracy Money Can Buy, Armed Madhouse and the highly acclaimed Vultures' Picnic, named Book of the Year 2012 on BBC Newsnight Review.

THERE WAS this Israeli man who from time to time put a slip of paper in the cracks between the stones of the Western Wall, asking God for favors - as Jews have been doing for centuries. They believe that the gates of heaven are located directly above the Wall, making it easy for their missives to arrive quickly.

The man always wondered what all the other petitioners were requesting from the Almighty. One night his curiosity got the better of him. In the wee hours of the morning he stole to the Wall, extracted all the pieces of paper and checked them. All of them were stamped "Request Denied."

This joke is typical for the attitude of a great many Israelis towards the edifice that every few months or so sets off a political and religious pandemonium.

NOW IT is happening again. A group of feminist Jewish women (mostly of American origin, of course) insists on praying at the Wall clad in praying shawls (talith) and wearing phylacteries (tefillin). They are physically attacked by the orthodox, the police have to restrain them, the Knesset and the courts intervene.

Why? According to Jewish religious law, women are not allowed to wear praying shawls, and certainly not phylacteries, which orthodox men put on their brow and forearm. They are not allowed to mingle with men at the holiest place of Judaism.

The part of the Wall set aside for prayer is about 60 meters long. 12 meters are reserved for women, separated by a low divide.

It seems that most religions are obsessed with sex. They assume that if a religious male sees a woman, whatever her age and looks, he is aroused and cannot think about anything else. So, logically, women must be hidden away.

The "Women of the Wall", many of whom are not religious at all, want to break the taboo by provocation. So there you are.

TWO YEARS before the birth of Israel, I went to look at the Western Wall for the first time . It was a moving experience.

To get to the place, you had to pass through a maze of narrow Arab alleys. In the end you found yourself in a narrow enclave, about three meters wide. To your left was the Wall - an awe-inspiring monumental structure, consisting of huge rocks. To see the top you had to lean back and look towards heaven.

On your other side was a much lower wall, behind which the ancient, poverty stricken Mugrabi (Maghribi, Moroccan) Quarter was lodged.

Very few people know - or care to know - that this enclosure did not come into being by accident. In 1516 Jerusalem was conquered by the rising world power, the Ottoman Empire, which was at the time one of the most modern and progressive states. Soon after, Sultan Suleiman the Magnificent built the - well, magnificent - wall of Jerusalem, as it stands today, a hugely expensive work which testifies to the immense devotion of the Ottoman Turks to this remote town in their realm. Suleiman's chief architect was Sinan, who also designed the Damascus Gate, which many people (including myself) consider the most beautiful structure in the entire country.

The benevolent Sultan instructed Sinan to set aside a special place of worship for the Jews in the town, so the architect created this enclosure at the Western Wall (not to be confused with the city wall). To make the wall more towering, he lowered the floor of the alley and put up the parallel low wall cutting it off from the surroundings. (Anyone interested in this history would be well advised to read the book "Jerusalem" by Karen Armstrong, a British ex-nun and historian.)

Legend has it that when the city wall, with all its 34 towers and seven gates, was finished in 1541, the Sultan was so overcome by its beauty the he had the architect killed. He did not want him to build anything else to compete with it.

UNTIL THEN, the Western Wall was not the main praying place for Jews.

Pilgrims from all over the world came to Jerusalem and prayed at the top of the Mount of Olives, overlooking the Temple Mount. But this holy place had become unsafe, because while the preceding Mamluk Empire was crumbling, roaming Bedouins had been robbing the pilgrims. Also, for the local Jews, who lived side by side with the Muslims in the town, the Western Wall was much nearer to their homes. So the holy place on the Mount of Olives was abandoned. Today, a luxury hotel stands there.

Since then, the Western Wall remains the holiest place in the world for the Jews, a place where multitudes assemble on holy days, army units swear allegiance to the State of Israel, rich Jews from all over the world bring their sons for Bar Mitzva and the Women of the Wall are kicking up the latest ruckus.

But basically there is nothing holy about the Wall. It was built by King Herod, a great builder and bloody monster, who was not even a real Jew. He belonged to the people of Edom, who had only recently been forcibly converted to Judaism. I doubt whether the present Chief Rabbinate would have recognized him as a Jew and have allowed him to enter the country, marry a Jewish woman or be buried in a Jewish cemetery.

Contrary to common belief, it was not a part of the Temple Herod built. To create the large platform on which the Temple stood, (and on which now stand the magnificent Dome of the Rock and the al-Aqsa mosque) he had to bring in a lot of earth and raise the floor. To hold this mass together, he built a wall around it. The Western Wall is nothing but a remnant of this supporting wall. WHEN THE Israeli army conquered East Jerusalem in the June 1967 War, one of the state's first acts was an outrage. At the time, the mayor of West Jerusalem was Teddy Kollek, a convinced atheist. But he was quick to realize the political and touristic significance of the place and ordered the immediate expulsion of the entire population of the adjoining Mugrabi Quarter, some 650 Muslim human beings. He then razed the whole quarter to the ground.

I happened to be in the Old City of Jerusalem on that day, and I will never forget the sights - especially the tear-covered face of a 13-year old girl carrying a large cupboard on her back.

On the site of the destroyed quarter, a huge empty space was created. This is now the Western Wall piazza, resembling a huge parking lot, which attracts tourists and prayer-shawl-wearing women. It faces the Western Wall, which has completely lost its awe-inspiring character and now looks like just another large wall.

The late Professor Yeshayahu Leibowitz, an orthodox Jew, called it the Diskotel (kotel means wall). He was full of praise for the Wahhabis, a fundamentalist Sunni sect which, upon conquering Mecca, immediately destroyed the tomb of the prophet Muhammad, claiming that revering stones as holy places was nothing but idolatry. They would surely have condemned the Western Wall rabbis as rabid pagans.

In the Jewish myth, the burial site of Moses is unknown, so it could not become a site for adulation.

It must be mentioned to Kollek's credit that he prevented another outrage. After the destruction of the Mugrabi Quarter, David Ben-Gurion, by that time a simple member of the Knesset, demanded that the entire Old City Wall be also razed to the ground. In the newly united Jewish capital, he asserted, there was no place for a Turkish wall. Kollek, a former chief assistant to Ben-Gurion, calmed the old man down.

MANY ISRAELIS believe that the Western Wall should be declared a secular national monument, irrespective of its religious connotations. But the State of Israel declared it a holy place and put it under the sole jurisdiction of the Chief Rabbinate. Bad for the Wall Women.

Lately, Nathan Sharansky has proposed a compromise: clear an additional space near the wall and allow everybody - man or woman, with or without prayer shawl, and presumably straight or gay or Lesbian - to pray there. The Egg of Columbus.

(Sharansky, the former much admired rebel against the KGB in the Soviet Union and later a failed politician in Israel, has been secured a sinecure as chief of the Jewish Agency, an anachronistic institution mainly occupied with raising money for the settlers.)

The rabbis may accept the compromise or they may not. The women may be allowed to pray without risking arrest or not. But the real question is why the state gave complete control over this place, that is so important to so many people, to the orthodox rabbis. After all, they represent a minority in Israel, as well as among the world's Jews.

The answer may be political, but it touches upon a far more important aspect: the lack of separation between state and religion.

This situation is being justified - even by atheist Israelis - by the argument that Israel relies on the support of world Jewry. And what unites world Jewry? Religion. (By the way, Leibowitz once told me that the Jewish religion had been dead for 200 years, and that what united world Jewry was the memory of the Holocaust.)

Under state doctrine, Israel is the Nation-state of the Jewish people. Under Zionist doctrine, the Jewish people and the Jewish religion are one and the same. Ergo, there is and can be no separation.

Anyone wanting to turn Israel into a normal country must reject both these doctrines. Israelis are a nation, and the State of Israel belongs to this nation. Every citizen, male or female, should be able to pray to whoever he or she wants, in any public place, including the Western Wall.

The Temple Mount (known to Muslims as Haram al-Sharif, the venerable shrine), including the Western Wall and, at a short distance, the Church of the Holy Sepulcher, are of immense importance to billions of people and should be a factor for peace.

A Black Agenda Radio commentary.

"The line between political beliefs and illegal action is eradicated, so that the 'radicalized' person or group is inherently deserving of liquidation."

Like all advanced police states, the U.S. national security regime has begun speaking its own, degenerate language. It is a mode of speech that simultaneously defines the "enemy" and justifies his or her destruction. The soulless, bureaucratic roots of National Security Speech belie the ruthless intent, which is to make the utter destruction of the targeted group or individual appear to be the natural order of things.

"Self-radicalization" is one of the terms coined by national security speakers. To people like President Obama, a guy who adds targets to his Kill List every Tuesday, "self-radicalization" represents a grave threat to the American state. "One of the dangers that we now face," said Obama, in the wake of the Boston Marathon bombing, "are self-radicalized individuals who are already in the United States," because it is difficult to prevent them from carrying out "plots."

In this context, it is clear that to "radicalize" means very much the same as to "weaponize"; the radicalized person has been transformed into a weapon. A radical is no longer simply an individual "who advocates thorough or complete political or social reform," but someone who by their very thought processes represents a clear and present danger to the United States. The line between political beliefs and illegal action is eradicated, so that the "radicalized" person or group is inherently deserving of liquidation. The operative word is "radical."

Obama is not talking about "Manchurian Candidates" who have been programmed against their will and without their knowledge to carry out acts dictated by others. He's talking about people who quite consciously object to U.S. policies, who might do something about it at some time in the future, or influence others' opinions about the United States. Obama's problem with the people he calls "self-radicalized" is that they cannot be easily entrapped or shown to be guilty by association with others who think as they do - and if they do act, their actions do not necessarily implicate others. For the fascist-minded, this must be quite frustrating.

"Assata remains radical."

Assata Shakur was radicalized [8] at least 45 years ago. An all-white jury convicted her of killing a New Jersey policeman. She escaped from prison, and has been under the protection of the Cuban government for the last 29 years, a political exile. The cop has been dead since 1973, Shakur's political party has long been defunct, and she is a grandmother far from home. But the FBI felt compelled to double the one million dollar reward for Shakur, and to elevate her to number one domestic terrorist. Why? Because Shakur continues to "maintain and promote her..."ideology" and "provides anti-U.S. government speeches espousing the Black Liberation Army message." That is, she remains radical, and therefore, a weapon, even at the age of 65, isolated from her 40 million fellow African Americans, few of whom know her name. But the FBI pretends to fear that her "ideology" might go viral at any time.

They don't believe that, of course. The political police are simply determined to make radicalism - of the "self" or group inspired variety - synonymous with criminality, much in the way that "Black" is now inextricably linked with crime in the public mind. According to that formula, a Black woman radical makes the perfect poster for a political witch hunt.

It's becoming an annual tradition: Spring rolls around, and while nobody is looking, Wall Street quietly lays siege to Washington and reaches a hand out to yank the last remaining teeth out of the government's financial regulatory head.

In the last two weeks, we've seen two major developments here. There was a wave of deregulatory bills that snuck through the House with surprisingly bipartisan support, and a series of regulatory decisions by the Commodity Futures Trading Commission that will seriously weaken the already-weak Dodd-Frank reform legislation, particularly with regard to derivatives trades.

If a story about a wave of bills designed to prevent the meager derivatives reforms passed in Dodd-Frank from being enacted sounds familiar, that's because it is. I wrote almost exactly the same story a year ago, in the middle of May, 2012, when a herd of Wall Street-friendly congresshumans teamed up in the House Financial Services Committee to push through a wave of nine ambitious bills targeting derivatives reform. This is from last spring:

The nine bills being contemplated by Congress take a variety of approaches to gutting Dodd-Frank. Two bills, H.R. 1840 and H.R. 2308, are essentially stalling tactics, requiring regulators to undertake more of those sweeping cost-benefit analy­ses that result in lengthy delays. Another bill, H.R. 3283, is more substantive: Sponsored by Connecticut Democrat and hedge-fund industry BFF Jim Himes, it exempts foreign affiliates of U.S. swaps dealers from all Dodd-Frank oversight.

The rule, if implemented, would make the next AIG possible, given that AIG was undone by half a trillion dollars in derivative bets produced by such a foreign affiliate - its London-based financial products outfit, AIGFP. If passed, says Rep. Brad Miller, a Democrat from North Carolina, H.R. 3283 would leave a "massive, gaping hole" in Dodd-Frank. "It would be very easy to move those trades to whatever the most indulgent country would be," Miller explains.

But this is the key to understanding how financial lobbyists succeed in getting what it wants on the regulatory front: They never stop. It's not a war of ideas, it's a war of resources. You march up the Hill with some crazy idea about overturning a bill prohibiting bailouts of companies that engage in risky derivative trades, you get knocked down, and you march up again, then you march up again, and again . . .

With each successive attempt, you peel off a few more Committee members in the House, slowly but surely weakening resolve. And while you're attacking on the legislative front, you also file a series of lawsuits that tie up the process by targeting reforms in court, and then you also send armies of lobbyists to sit in the laps of regulators during the rule-making process, so that key new laws (like the Volcker rule, designed to separate risky trading from federally-insured depository banking) are either written in reams of industry-friendly language, or delayed altogether.

No matter how bad your ideas are, and how unpopular they are (or, rather, would be, if anyone in the general public understood them and/or cared enough about them to complain to their congressional reps), you can still score huge wins just by continually attacking and chipping away.

Which brings us to this month: A little while back, I got a call from someone in the House. "You wouldn't believe the shit they just pushed through the Financial Services Committee," he groaned. This person read off a list of bills, suggested I look them up, then specifically told me to look at how many Democrats voted "yea" on them.

"A lot of bad D votes on this one," was the editorial comment here.

Almost all of these bills turned out to be aimed directly at Title VII of the Dodd-Frank Act, i.e. the derivatives portion. They included:

H.R. 992 would "repeal most of Dodd-Frank Section 716" of the Dodd-Frank Act. This section, also known as the "Lincoln Rule," was one of the hottest of hot potatoes during the negotiations for the Dodd-Frank bill (see here for more details).

That portion of Dodd-Frank began with a simple, bold statement:

"Notwithstanding any other provision of law," it read, "no Federal assistance may be provided to any swaps entity with respect to any swap, security-based swap, or other activity of the swaps entity."

In other words, no matter what other laws are written, the federal government doesn't bail out any "swaps entities" or "activities of the swaps entities."

This sounds great, except Congress then decided on an exception or two to that law - among other things, federally-insured banks would be permitted to engage in swaps trading, so long as it was for "bona-fide hedging" and "risk-mitigation efforts."

Put another way, so long as the bank is merely guarding against loss, such behaviors are okay and bail-out-able.

But we've already seen that banks call pretty much anything hedging. In the case of the infamous London Whale trades - which were the very definition of stupid, reckless, doubling-and-tripling-down on insane billion-dollar bets high-stakes gambling - Chase and Jamie Dimon tried to call that activity hedging. Later, of course, in the Senate, Dimon was forced to admit that the trades, er, maybe were not hedging at all.

The lesson of this is that no law that allows "hedging" as an exemption will have much teeth, because most banks can find a way to call almost anything they do hedging.

But apparently this wasn't enough. This new bill in the House baldly expands the universe of trading activities that we may later have to bail out. It's actually written that way - check out this summary of H.R. 992, the "Swaps Regulatory Improvement Act" (God, I love the names):

Declares the prohibition against federal government bailouts of swaps entities inapplicable to: (1) a foreign banking organization supervised by the Federal Reserve; and (2) an insured depository institution or a U.S. uninsured branch or agency of a foreign bank that limits its swap and security-based swap activities to hedging and similar risk mitigating activities (as under current law), non-structured finance swap activities, and certain structured finance swap activities.

In English, this just means that in addition to hedging, which we banks think is pretty much everything we do, we'd like to be eligible for bailouts when we engage in "non-structured finance swap activities and certain structured finance swap activities."

If you read the fine print, what they mean by "certain structured finance swap activities" are swaps of a type and quality "to which the prudential regulators have jointly adopted rules," i.e. to be determined later during the rule-making process.

So to sum up, we banks would like to remain eligible for bailouts when we engage in hedging, which we think is everything we do, and also additionally when we engage in "certain structured finance swap activities," which will mean whatever we tell the rule-makers it means after the bill is passed.

This bill passed by a vote of 53-6 in the Financial Services Committee. Only six House members voted against expanding the types of financial behaviors that we may later have to bail out. Go figure.

Also passing in committee:

H.R. 1062, the "SEC Regulatory Accountability Act," is the same bill as H.R. 2308 from last year, requiring the SEC to undertake a cost-benefit analysis of any new rule before it is adopted. These "cost-benefit analysis" bills are pure stalling tactics. They have absolutely no purpose other than to force the government to spend valuable time, effort and money engaging in pointless reviews of rules that already in some cases take years to craft, incidentally with the constant input of bank lobbyists.

Politically, these bills serve another function. They allow members that may have voted for a certain reform originally to recoup some status with the banks by left-handedly undermining the rule later on with these pointless cost-benefit delays. This one passed 31-28 in committee.

Then there was H.R. 1256, the "Swap Jurisdiction Certainty Act," which:

. . . exempt[s] a non-U.S. person in compliance with the swaps regulatory requirements of a G20 member nation from U.S. swaps requirements unless the SEC and CFTC jointly determine that the regulatory requirements are not "broadly equivalent" to U.S. swaps requirements.

This is yet another leprechaun trick. What it basically means is that if you're Goldman or Chase and you have an office in some place like Mexico or Turkey or Russia or Saudi Arabia, you can do all the swaps business you want from there, under whatever film of derivatives regulation exists in that country, without having to comply with U.S. swaps rules.

That is, unless the SEC and the CFTC make a joint determination that that country's laws are not "broadly equivalent" to our own.

This really just gives banks permission to go around the world regulator shopping. "It just makes it harder for the SEC to prevent regulatory arbitrage," is how one analyst put it to me. "That's all it does."

That one passed 48-11.

There are six more such bills, and who knows, the Senate might hold the line on all of them. But even if it does, nobody can stop regulators from backtracking on reform by writing crappy rules, which is also happening.

This past week, the CFTC released a series of new rules governing the swaps business. The rules are highly technical and basically unintelligible to people who don't work in these markets. But there are some basic concepts that can be understood.

To backtrack a little, the aim of reformers going into the Dodd-Frank debates was to do what FDR did with stocks after the crash of 1929: put them on open exchanges. That reform worked and has made the stock market a safe, thriving financial arena ever since. Today, when you go to buy a share of IBM stock, anyone can see what the price is, and there's constant data on bids and offers being that is made available to anyone who wants to participate.

But in the existing "over the counter" market for derivatives, the whole thing is a black box. There's no exchange where you can see with the price of this or that interest rate swap or credit default swap is.

"It's basically just a bunch of people on the telephone," is how Dennis Kelleher of Better Markets puts it. And when the five biggest banks control most of the derivatives market, the potential is there for all sorts of abuses.

The anemic Dodd-Frank bill halted well shy of forcing derivatives onto exchanges (coupled with the failure to break up the TBTF banks, it was the largest failure in the bill). Instead, it set up a structure of what are called "Swap Execution Facilities," or SEFs, which are a step somewhere between a completely opaque black box and an open exchange.

In the SEF model, participants can see some pricing data, but it's far from a system like the stock market, in which data from all trades is immediately and transparently posted. In fact, Wall Street has been fighting tooth and nail ever since Dodd-Frank passed to keep the activity in the SEFs as close to the old black-box model as possible.

There are two main avenues for preventing transparent swap trades. One is through something called an RFQ, or "request for quote," which allows participants in the market to pursue trading on an essentially private, person-to-person basis, without broadcasting the transaction to everyone. The other is through "block trades," which are trades so big that they can be done outside of the exchanges.

Without getting too far into the weeds, the new CFTC rules will significantly expand the use of both loopholes. "Wall Street and its allies fought to get as few RFQs as possible and to allow as many block trades as possible in the final rules," says Kelleher, adding that this was done to "prevent a level playing field, competition and transparency."

Essentially, the rules as written will keep the derivatives market functioning in pretty much identical fashion to the old "bunch of guys on the telephone" model. "It's pretty much the same system," sighs Kelleher. Members of Congress, when they talk about having to vote on issues like derivative reform, express frustration about the political dynamics of this debate. When they go back to their districts, nobody is standing up at town halls and shaking fists about relaxing rules at Swap Execution Facilities.

On the other hand, when they return to Washington, they're inundated with bank lobbyists who offer extensive financial backing if they play ball on these votes, while simultaneously threatening to run primary candidates if they don't. Thus there are plenty of people in both parties who are extremely tempted to look the other way and accede to bank interests when it comes to the question of building the infrastructure for, say, the derivatives markets.

Moreover, the Democrats have become the victims of their own pusillanimity on these issues. The main Wall Street argument against these new rules is that they're excessive and onerously complicated. But they're only complicated because the Democrats didn't have the stones in the original Dodd-Frank debate to insist on simple concepts like putting all trades on open exchanges.

Instead, they built a system based upon a series of fiendishly complicated compromises. They keep adding more and more fine print to the infrastructural rules for things like Swap Execution Facilities and deriviatives clearing, and the more fine print there is, the more cracks and crevices Wall Street's lawyers can find to slither through.