Comments on: Here’s Why It’s Time to Ban Credit Default Swaps

By: Geithner and Summers Protect Free Market Mantle Against Regulatory Reform

Geithner and Summers Protect Free Market Mantle Against Regulatory Reform — Thu, 29 Oct 2009 07:43:16 +0000

[...] Money Morning: Here’s Why It’s Time to Ban Credit Default Swaps [...]

By: Rodney Whitacre

Rodney Whitacre — Thu, 16 Jul 2009 17:26:43 +0000

I agree, this is a great article. I wish that this, and other articles like it, could be presented to the brainwashed masses.
Perhaps it is appropriate to use the abbreviation (CDS) for this “poison” to our “free market system”, because as we all know, that also stands for “controlled dangerous substance.” (However, I don’t think that we will see the government assign a “czar” to battle the former anytime soon.)
It is amazing and sad that our economic “geniuses and gurus” buy into, and worse, sell this garbage. It is also amazing to watch the markets “rally” on the backs of the banks (especially Goldman Sachs) with their smoke and mirrors profit reports, while they gloat about their bonuses, which they of course, deserve because of their heroic roles in “saving” our capitalist economy.

By: Equity Merchant Banks: The Financial Sector"s Profit Powerhouse of the Future

Equity Merchant Banks: The Financial Sector"s Profit Powerhouse of the Future — Thu, 16 Jul 2009 14:54:57 +0000

[...] Goldman be allowed to become a clearinghouse agent in the multi-trillion-dollar underworld of credit-default-swap trading, and be allowed to keep an eye on all its counter party [...]

By: Joachim Mueller

Joachim Mueller — Thu, 16 Jul 2009 09:52:35 +0000

Excellent article!

Goldman Sachs is the quasi government of the US. They have their hands in everyone’s pockets (from World Bank to the US government. They are the ultimate Monopoly players. Therefor they should limited severely to restore markets. But who has the guts to take them on? Not Mr. Obama who relies in part on their advice.

All the “creative” financial instruments are created to part everyone from his/her money. Who is cheering that? CNBC? or FOX? Are toxic instruments the reason why financial firms insist on “retaining talent”? That “talent” brought destruction and should be in prison and all these “aggressive” business people too. We need to go back to simple operations and decent business practices. Otherwise “Casino USA” will create more enemies.
OH! You’re my new favorite blogger fyi

By: Joachim Mueller

Joachim Mueller — Wed, 15 Jul 2009 16:39:56 +0000

Excellent article!

By: Adam Smith

Adam Smith — Wed, 15 Jul 2009 14:42:21 +0000

Great article. Derivatives like Credit Default Swaps (CDSs), Collateralized Mortgage Obligations (CDOs), Credit Interest Rate Swaps (CIRSs) and others have been the direct cause of the global meltdown because they increase risk in the financial markets. Just ask the SERS Pennsylvania Pension fund that lost about $1.4 billion with Swaps. Since they are really insurance contracts, require any CDS to have the guarantor of the payment “reserve” 80%, of the potential pay out in safe instruments, the buyer of the Swap must have a financial (insurable) interest in the underlining asset (they own it) and limit the fees charged to $100,000. The book FIASCO- the Inside Story of a Wall Street Trader exposes the various risks involved in these derivative investments.

By: Lawrence Kramer

Lawrence Kramer — Wed, 15 Jul 2009 12:17:11 +0000

Bravo!

A CDS is a life insurance contract on a company. Having no way to prohibit the issuance of such policies to people who have no insurable interest in that “life,” we need to ban them. To any insurance professional, this is a no-brainer. Why the financial regulators are blind to this obvious problem is harder to fathom.