Finance Overhaul Casts Shad.. - Finance Overhaul Casts...

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See a sample reprint in PDF format. Order a reprint of this article now BUSINESS JULY 13, 2010 Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com More Senate Takes Final Steps on Financial Bill Video: The Big Interview: Sheila Bair Details: What's in the Bill Breakdown: How the senators plan to vote Vote: Should the bill pass? Financial Regulation Watch By MICHAEL M. PHILLIPS GILTNER, Neb.—Farmer Jim Kreutz uses derivatives to soften the blow should the price of feed corn drop before harvest. His brother-in-law, feedlot owner Jon Reeson, turns to them to hedge the price of his steer. The local farmers' co-op uses derivatives to finance fixed-price diesel for truckers who carry cattle to slaughter. And the packing plant employs derivatives to stabilize costs from natural gas to foreign currencies. Far from Wall Street, President Barack Obama's financial regulatory overhaul, which may pass Congress as early as Thursday, will leave tracks across the wide-open landscape of American industry. Designed to fix problems that helped cause the financial crisis, the bill will touch storefront check cashiers, city governments, small manufacturers, home buyers and credit bureaus, attesting to the sweeping nature of the legislation, the broadest revamp of finance rules since the 1930s. Here in Nebraska farm country, those in the business of bringing beef from hoof to mouth are anxious, specifically about the bill's provisions that tighten rules governing derivatives. Michael M. Phillips/The Wall Street Journal Jim Kreutz, a Nebraska farmer, hedges 70% of his 345,000-bushel corn harvest every year. Finance Overhaul Casts Shadow on Plains - WSJ.com http://online.wsj.com/article/SB10001424052748704258604575361182. .. 1 of 5 7/18/2010 8:30 PM
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How Farmers Use Derivatives Click to see full graphic. What's Made It Into the Bill? For consumers, for investors, for banks and for the government. Some worry the coming curbs will make it riskier and pricier to do business. Others hope the changes bring competition that will redound to their benefit. "Out here we like to cuss the large banking institutions because of the mortgage mess, but we also know that without them some of these markets don't work," says Mike Hoelscher, energy program manager for AgWest Commodities LLC, a Holdrege, Neb., brokerage that provides derivatives services to the farming industry. Derivatives are financial instruments whose value "derives" from something else, such as interest rates or heating-oil prices. The first derivatives were crop futures, which appeared in the
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Finance Overhaul Casts Shad.. - Finance Overhaul Casts...

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