ergo sum

GFI Group Is Not Your Typical Brokerage

hopefully there are not 'rouge' traders
did you mean 'rogue traders' at their competitors
when you meant 'rogue brokers', and really they are brokers that just left for another interbank broker...not rogues in any sense like a rogue trader.
Do you know the difference between wholesale and retail brokers? Go visit. It should help.

GFI Group Is Not Your Typical Brokerage

By the articles, "line of thinking" if you can call it that...when you lose your cash cow you are a good investment. So we should all be buying AMBAC and MBIA and even LEHMAN and UBS because their business models or practice of their business models have failed. Yup I see your point. I would have preferred to have bought the credit default protection.

GFI Group Is Not Your Typical Brokerage

Massive increase in liquidity? Lets see BIS says derivatives are at 576 trillion dollars and rising how much liquidity do you want? Or is it you are confounding your vague notion of the lack of liquidity first IN CP, then SIV , then Subprime mortgages, somehow with the complete other end of the spectrum Credit default swaps? The inability to distinguish one three letter acronym from another starts here apparently.
No, UFOs are not a financial product or derivative.

GFI Group Is Not Your Typical Brokerage

Its nice to see that not only do you have know idea in this article what you are writing about but that you also censor comments correcting the facts as you have mine in the last twenty-four hours.
Brokers don't really have 'balance sheets' like banks do. Brokers interbank brokers have almost no overhead to speak of except computers and rental space.... Clearly the column should be renamed
"Affirming the ignorance of the Ignorant"

GFI Group Is Not Your Typical Brokerage

Utter non-sense. They are a broker so they have no exposure to pay on a default swap unless they are stuffed. And Having lost their whole A Team in credit default swaps its unlikely they are doing as much business, re the lost 50 mil a year.
"Clearing house of sorts" what sorts. What does that mean. Does it mean you have no clue what you are writing about?

GFI Group: It's Not Your Typical Brokerage

write...

GFI Group: It's Not Your Typical Brokerage

dishonesty in the sub prime mortgage markets and greed on wall street which securitized and resold that dishonesty account for the credit crunch not derivatives. And numbskulls like yourself who don't bother to investigate what they right about help too.

GFI Group: It's Not Your Typical Brokerage

Credit derivatives currently account for a little of 30% of GFI Groups revenue. ---basically a meaningless statement....

GFI Group: It's Not Your Typical Brokerage

what you fail to mention is that the credit derivatives team LEFT with 50 million in yearly busines...and their credit derivatives slowdown has nothing to do with what you describe. In fact the Credit default swap market is going gangbusters in this default filled world.
It also remians to be seen if the proposed exchanges come to pass, and whether they will have any impact on the predominantly voice brokered market....so what are you smoking exactly?

No Mr. Greenspan, Conditions Aren't Like 1998

The Fed's irrelevance is a central important point.
Modifying the short-term rate does not have anywhere near
the effect it once had since most global markets work in the
Euro-Dollar Market which is likely more relevant than only the U.S.
market.
Futher the Fed probably exacerbates bubble problems with their erroneous predictions based on nothing. The fed itself has documented that there is not financial statistic that predicts future economic conditions. So if they were realistic and insisted on messing with things they should work looking back over a few months versus blowing wind with fed predictions and actions based on those specious predictions.
Acting as they do using archaic structures the Fed also tampers with inflation with or without effect. And again it is specious economic science. On what basis do they know what a 'correct' level of inflation or unemployment is. And given the general innacuracy of economic statistics which could easily be a percentage point or two off why do they 'fine' tune at low rates of inflation when the greater risk if their actions have an effect beside creating self fulfilling prophesies, endanger the economy by possibly
endgendering a deflation.

Are 'Swaptions' Responsible for the Current Financial Turmoil?

Furthermore if you want to criticize UBS recommendation it would appear that it may play into their investment bank trading interest violating the supposed Chinese wall that should exist...
If the swaptions you describe, perhaps innacurately, are put into the proper nomenclature sp that 1y2y is 1y-2y and 1y10y is 1y-10y
these then are a one year option on a two year swap (starting in one year) and a one year option on a 10y swap (in one year) and would be an alternative means of playing the TED Spread a year from now......and it would be the spread that is 'expensive' not just one of the structures...or is it they need to buy this and they are encouraging retail to sell it to them?
To summarize, is UBS trading their advice or on the opposite side?
And what is it exactly you and they are describing?

Are 'Swaptions' Responsible for the Current Financial Turmoil?

Swaptions aren't responsible for anything since they can't be.
People in finance, are the creators of sub-prime situation which has frozen the commercial paper market, the retail and large banks creating paper out of pools of bad credit to sell on via securitization of it are responsible.
The motion in the mortgage market to hedge through swaps over the last 5 to ten years has further entangled mortgages with the Libor Market...
Usury creating untenable loans with balloon payments and greed
selling it on by money center banks create the problem.
Clearly you are just on the 'derivatives are bad' bandwagon and are helping point away from the real problem, which is irresponsible and evil action by the moneyed ruling class at the cost of the taxpaying individuals and those suckered into these arrangements. Bush' solution is not a solution. In fact the Fed easing will not solve the problem either
since it does not address the correct time frame for efficacy which is captured in CP and not over night or Fed Funds etc....and merely provides a further opportunity to exploit the borrowers with taxes on
fictitious 'paper' money.
Hopefully, swaptions were used to hedge all the leverage so no real damage is done and its just another Bush laying off the cost of Banking and Investing bank blunders on the shoulders of the paying populace.