The Battle Against Letting Wall Street Continue to Make a Killing on Derivatives

truehawk · Oct 23, 2009

Quote from trendlover:

"So what are they hiding" Quote from KINGOFSHORTS

No one is watching the leverage. No one have to show the money(margin) to cover the bet.
So they want to hide the big bet of leverage.

Precisely:
They were so upset when Brooksly Born wanted to have everything registered on an exchange because in 1996 because the banks evidently had by that time made a ton of money selling Swaps (insurance policies against default) they had no reserves to cover and did not want out in the open.

Random.Capital · Oct 23, 2009

Quote from nutmeg:

If you paid your mortgage, a derivative did not cause the loss of your home.

More to the point - without derivatives, that 30 year mortgage is going to have a double-digit interest rate.

Random.Capital · Oct 23, 2009

Quote from trendlover:

No one is watching the leverage.

That's not because anything is being hidden, it's because a number of institutions know full well the power of their campaign contributions.

Without full faith and credit in a federal bailout, there is no way Goldman Sachs makes those huge bets with AIG.

ammo · Oct 23, 2009

everyone pull their cash out of the five major banks

trendlover · Oct 23, 2009

Quote from Random.Capital:

That's not because anything is being hidden, it's because a number of institutions know full well the power of their campaign contributions.

Without full faith and credit in a federal bailout, there is no way Goldman Sachs makes those huge bets with AIG.

They are hiding when they do not want something on their balance sheet?

jueco2005 · Oct 23, 2009

Could this means that Bank Street not Wall street rules??

ElCubano · Oct 23, 2009

they are making money in a fantasy world, the real holy grail. Of course they don't want that to be in the open/regulated. The matrix of fees must be mindboggling, fees on top of fees made from fluff.

nutmeg · Oct 23, 2009

What is plan B to securitize assets?

If derivatives are the hot potato, there ya go, no one is lending.

trendlover · Oct 23, 2009

I am not sure I understand how it work, but if OTC is not on exchange, then it is hidden, true? So not all people can see the bid/ask price, true? So this can make a very big spread for some people to make money on that.

Free Thinker · Oct 23, 2009

Quote from trendlover:

I am not sure I understand how it work, but if OTC is not on exchange, then it is hidden, true? So not all people can see the bid/ask price, true? So this can make a very big spread for some people to make money on that.

the reason to put them on a regulated public exchange is so a third party can make sure these is enough capital to pay off the contract. it has little to do with bids and asks.