So the European Union's 27-nation bloc is setting new rules for short selling and derivatives trading. The European Commission set up the European Securities and Market Authority to police European markets.

Michel Barnier, European Union commissioner in charge of reform said: "Today we are proposing rules -- so we know who is doing what and who owes what to who."

As the Senate moves forward with passing its landmark financial reform bill, it has at least reached an agreement on one important component -- the "too big to fail" provision. The Dodd-Shelby accord was supposed to include a proposed $50 billion fund, paid by large financial firms to cover the costs of break up firms when they get in a bind.

There are several other proposals and provisions still being discussed. A proposal by Blanche Lincoln calling for banks to spin off their derivatives business is losing steam, but it is still on the table. Let's not forget that it was the wild speculation in derivatives that caused our financial meltdown. To do nothing on this issue borders on irresponsibility.

The U.S. Treasury is selling 1.5 billion of its shares of Citigroup Inc. (C) and it's quite likely that Citigroup will start buying back shares at some point, but when?

Given the fact that the number of shares has doubled over the past couple of years, and that there is pressure on the stock from the government sale combined with news of the final negotiations regarding a sweeping financial reform bill coming to a conclusion, it was no wonder that the stock took quite a beating through Monday's trading session.

The ratings game that was played during the financial crisis was a major factor in bringing down our economy.

Here's how the game was played. Banks like Goldman Sachs (GS) would pay a rating agency to rate their securities. Moody's chief executive, Raymond McDaniel, told a Senate panel on Friday that he was not told by Goldman about the fact that hedge fund Paulson & Co. was betting against Goldman's Abacus securities. He said: "It just changes the whole dynamic -- if the person choosing it wants to blow it up."

The financial services reform process is likely to yield many public policy improvements, but one dimension that Congress should not act on concerns the U.S. Federal Reserve.

One reform effort would authorize the General Accountability Office (GAO) to audit the Federal Reserve. The initiative, though well-intentioned, would represent a regression.

We can just about shelve any hopes of banking reform from Congress. Barney Frank, Chairman of the House Financial Services Committee said: "I don't think you're going to see that happen" (referring to mandates for financial companies to process their swaps through a clearinghouse).

Frank went on to say that there would be a presumption that standardized contracts would be sent to a clearinghouse but that it would not be an iron clad rule. With the bankers ignoring established rules and doing pretty much what they want, forget about that idea.

In a word: yes.

Despite all the talk about regulating these speculative investment vehicles, "Obama's financial overhaul plan included no big surprises or threats to the lucrative, secretive industry," writes The Wall Street Journal.

The name of the game is lobbying, which is easily funded by the $1.3 trillion dollar industry. Even after numerous Ponzi schemes and frauds have recently been exposed, the U.S. government has failed at regulating hedge funds, the most speculative area in finance, in part due to the industry's lobbying efforts.