Relevant and even prescient commentary on news, politics and the economy.

Default Events, Legal Contracts, Derivatives, and Greece

Barry Ritholtz, who generally knows better, blew a gasket at ISDA for yesterday’s ruling that Greek bonds are not yet in default. Specifically, “The International Swaps and Derivatives Association said on Thursday that based on current evidence the Greek bailout would not prompt payments on the credit default swaps.” > Here is a question for […]

Is the House Trying to Encourage Criminal Activity?

I left out of the last post why David Vitter (claims) he is blocking the two SEC nominees: Sen. David Vitter (R., La.) will block two nominees to the Securities and Exchange Commission until the agency announces whether victims of R. Allen Stanford’s alleged Ponzi scheme are owed compensation from the Securities Investor Protection Corp….“We’ve […]

Some People Call Me Mau-rice

It’s not that the data is different; it’s the interpretation. For instance, Brad DeLong’s What Obama Needs to Do is three(or four) fine suggestions, one point (2) that hasn’t worked yet but bears repeating, and a moment (5) of hope that really does required Congressional action, as Stan Collender noted today. But the three good […]

Derivatives: greater transparency is needed

by Linda Beale Derivatives: greater transparency is neededcrossposted with Ataxingmatter The big banks got into considerable trouble doing derivatives trades–especially the credit default swaps where AIG was the major counterparty and the taxpayers ended up bailing out the Big Banks like Goldman Sachs. So surely one of the results of “financial reform” in the wake […]

Interlude / Self-Indulgent Advt

I want one of these positions: The Office of Complex Financial Institutions (which the agency has assigned the acronym CFI) “will perform continuous review and oversight of bank holding companies with more than $100 billion in assets as well as non-bank financial companies designated as systemically important by the new Financial Stability Oversight Council,” the […]

Senate passes HR 4173 finance reform conference report

by Linda Beale crossposted with Ataxingmatter Senate passes HR 4173 finance reform conference report[updated to add information on Geithner’s opposition to Warren 7:12 pm] On a 60-39 vote, the US Senate passed the Dodd-Frank H.R. 4173 financial reform conference report today. While the bill imposes some new restrictions and creates a consumer protection agency, most […]

Derivatives issue tomorrow

The House-Senate conference committee on financial reform takes up the derivatives issue tomorrow. Will they adopt the Senate version (which covers 90% of derivatives according to the CFTC) or the House version which is riddled with loopholes and covers only 60% of derivatives trading?

More on derivatives

by cactus Last week I wrote A Simple Explanation of How The Use of Derivatives Created The Great Recession. I want to clarify things with an analogy that at first glance may seem unrelated. Let’s talk about poker. Its a game that seems to have grown in popularity in the last decade, especially with the […]

Derivatives are useful for Asset-Liability Management. Nu?

I was going to post something a couple of days ago on Greece’s derivatives deal, but knew I was missing a key piece. It became prominent yesterday, and Felix’s summary today gets it spot on: So while it’s entirely fair to blame Greece for trying to hide its debt, and to blame Eurostat for letting […]