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Germany Bans Naked Bond Derivatives

Germany is mad.  So mad it is doing something about it.

The country has banned naked credit default swaps based on Eurozone government bonds.

U. S. Treasury Secretary Tim Geithner, who is now officed within  Goldman Sachs office space, was unsuccessful in his attempt to reverse this rule, which is a blow to the bonus money pool at Goldman Sachs.  The Grman regulation calls for sellers to possess a bond that they sell shorf, which makes the process more costly and potentially limits profits.

However early assessments think the derivatives ban will be limited to Germany.

A more complete explanation of why Germany made this move is found here:

http://tarpley.net/2010/05/19/germany-bans-naked-cds/

Disclosure: none