AnonymousAlso

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

Why do CDS have anything to do with it? They are marked to market every day so most of the money is likely made before the bankrupty.

Plus, a 'credit event' which is what triggers payout on a Credit Default Swap doesn't have to be a bankrupty. A debt reorganization is likely to be treated as a 'credit event'.

Look at what happenned at Fannie & Freddie when they were taken over - but not bankrupted - that triggered payouts on the credit default swaps.

Settlement Auction for Lehman CDS: Surprises Behind

Maybe Morgan & Goldman as part of this deal to become BHC are minimizing their particpiation in this area? Goldman just got $10 billion + and one would guess Buffet who appears to dislike these kind of things would have looked carefully.

In addtion the centeral warehouse / clearinghousefor CDS comments that the net transfers on Lehman will only total about $6 billion. Does that jib with what you see?

We're in an Opacity Crisis

Maybe the SEC should make a bunch of their regulation that is voluntary – required? Like the oversight of investment banks was? Like the oversight of NASDAQ is? They just have been too busy to write the rule.

Isn’t the Treasury Direct programming a way for retail investors to purchase Treasuries?

Require all derivative products to trade thru a central exchange after a product has reached a certain size. For instance say $100 billion in notional size would have bought the CDS under supervision in 1998-1999. (When this was first discussed but various federal agencies couldn’t decide who should do it.)