Michael Collins
03-07-2009, 02:05 AM
I've talked about the looming Credit Derivative Swap comet about to hit the economy. I found someone who knew a fair amount about this and I asked this solution - WTF man, dude?
From: http://www.scoop.co.nz/stories/HL0809/S00274.htm 09/22/2008
The perpetrators can position all day long, taking advantage of the citizens through a quiescent White House, Congress, and judiciary.
But the truth will emerge - the country is broke and not because we don't work hard enough, make good products, and provide quality services. We're broke because the greediest people in the world couldn't contain their greed and there was nobody watching them who wasn't benefiting. Now the watchers are desperately trying to make it all go away.
There needs to be an accounting and a correction - and not by the usual suspects.
Here's one way to start with derivatives crisis in major institutions:
"If all the top 25 financial institutions were put into receivership, and (big if) if they all could be liquidated under an agreed legal framework, many of these risky contracts could be allowed to offset each other, and much of the risk eliminated."
Private correspondence, Numerian, The Agonist, Sept. 21, 2008
http://agonist.org/diary/numerian
Well, guess what, that's what the heavy hitters are calling for.
This will get ugly because none of the 'owners' of these trash bets, derivatives,' will cop to a write off. The issue will be defined: crash anything left of the current economy or pay these idiots off. Whose side are you on? This is what they call a "teaching moment."
Bloomberg.Com 03/06/2009
Scholes Advises ‘Blow Up’ Over-the-Counter Contracts (Update2)
http://agonist.org/20090306/scholes_advises_blow_up_over_the_counter_contracts_update2
By Christine Harper | New York | March 6, 2009 18:31
Bloomberg.com - March 6 (Bloomberg) -- Myron Scholes, the Nobel prize- winning economist who helped invent a model for pricing options, said regulators need to "blow up or burn" over-the-counter derivative trading markets to help solve the financial crisis.
"The markets have stopped functioning and are failing to provide pricing signals," Scholes, 67, said today at a panel discussion at New York University’s Stern School of Business. Participants need a way to exit transactions and get a "fresh start," he said.
The "solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over," he said, referring to credit-default swaps and other complex securities that are traded off exchanges. "One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices."
From: http://www.scoop.co.nz/stories/HL0809/S00274.htm 09/22/2008
The perpetrators can position all day long, taking advantage of the citizens through a quiescent White House, Congress, and judiciary.
But the truth will emerge - the country is broke and not because we don't work hard enough, make good products, and provide quality services. We're broke because the greediest people in the world couldn't contain their greed and there was nobody watching them who wasn't benefiting. Now the watchers are desperately trying to make it all go away.
There needs to be an accounting and a correction - and not by the usual suspects.
Here's one way to start with derivatives crisis in major institutions:
"If all the top 25 financial institutions were put into receivership, and (big if) if they all could be liquidated under an agreed legal framework, many of these risky contracts could be allowed to offset each other, and much of the risk eliminated."
Private correspondence, Numerian, The Agonist, Sept. 21, 2008
http://agonist.org/diary/numerian
Well, guess what, that's what the heavy hitters are calling for.
This will get ugly because none of the 'owners' of these trash bets, derivatives,' will cop to a write off. The issue will be defined: crash anything left of the current economy or pay these idiots off. Whose side are you on? This is what they call a "teaching moment."
Bloomberg.Com 03/06/2009
Scholes Advises ‘Blow Up’ Over-the-Counter Contracts (Update2)
http://agonist.org/20090306/scholes_advises_blow_up_over_the_counter_contracts_update2
By Christine Harper | New York | March 6, 2009 18:31
Bloomberg.com - March 6 (Bloomberg) -- Myron Scholes, the Nobel prize- winning economist who helped invent a model for pricing options, said regulators need to "blow up or burn" over-the-counter derivative trading markets to help solve the financial crisis.
"The markets have stopped functioning and are failing to provide pricing signals," Scholes, 67, said today at a panel discussion at New York University’s Stern School of Business. Participants need a way to exit transactions and get a "fresh start," he said.
The "solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over," he said, referring to credit-default swaps and other complex securities that are traded off exchanges. "One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices."