Article

2009-09-12 Economy

Big Money Ahead of Obama on Derivative Flushing

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Posted by Elmosh Slaique7604 2009-09-12 08:16|| || Front Page|| [2 views ] Top

#1 Credit default swaps (CDS) were ILLEGAL up until 2000, when an act of Congress was passed, canceling state laws against them. If you wonder that there might have been some kind of valid reason for the bans, check out this story on 60 minutes.
I see no reason why these CDS bets shouldn't be outlawed as gambling, as they used to be.

Posted by Anguper Hupomosing9418 2009-09-12 10:50|| 2009-09-12 10:50|| Front Page Top

#2 AH:

Private enterprisers want to write down CDS paper a little bit each year, but at a uniform rate so that they can maximize the process. Within 10 years derivate residue would evaporate.

Congress would be too embarassed to sandbag a private initiative that won't cost tax-payers a cent and will deliver the type of stability, necessary to correct recession elements. Lehman Bros were caught off-guard when Paulsen and Bernake called the major players into the meeting where the Treasury Secretary said he wouldn't bail out CDO vendors. Bernake was then put into the position of using Fed statutory and regulatory powers to force re-capitalization on Lehman and Merrill Lynch. The Fed always had regulatory leverage over the derivative market but, then again, Lehman' CEO, Richard Fuld, was on the NY Fed board until mid 2008.

Posted by Elmosh Slaique7604 2009-09-12 11:17|| 2009-09-12 11:17|| Front Page Top

#3 Still - the run down may be a valid argument.. but it should be illegal.

Posted by 3dc 2009-09-12 14:28|| 2009-09-12 14:28|| Front Page Top

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