MarkGillCPA

Berkshire Hathaway: Proof That the CDS Market Is Irrational

IMHO, CDS contracts do more harm than good and should be eliminated from the financial world.

Mr. Lanthrop, hedge funds are not buying CDSs to hedge against bond portfolios. They buy them at the same time they are shorting common. They do this to incite fear in the markets. Last I checked market manipulation was supposed to be illegal. If the SEC was doing its job, these things would have been made illegal over a year ago.

I have no problem allowing anyone to short a stock. An argument against CDSs is not an argument against shorting. But we cannot allow someone to link a short position with a CDS to manipulate markets.

We need to get our financial markets back to the basics of buying and selling stocks and bonds. Its the derivatives that are destroying us.