US Commercial banks own $202 trillion in derivatives.

Quote from Martinghoul:

Apart from blaming all the world's ills on the derivatives mkt, I actually don't completely disagree...

This is a post that summarizes my thoughts on the matter exactly:
http://www.informationarbitrage.com/2009/08/fixing-wall-street-the-feds-blew-it.html

But this has NOTHING to do with sloppy, sensationalist, lazy reporting. If you want to make a point about excessive leverage, don't make it using numbers that, on scrutiny, mean nothing. Maybe then people, including the people that make the relevant decisions, will actually listen.
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Agreed. The notional numbers are defintitely more sizzle than steak, but hey, that's what sells. And there are a lot of different types of derivatives - it's far from being a monolithic form of financial engineering.

Nonetheless, when it comes to the CDS market - in my view it needs regulation and transparency - an exchange. And I'm not so sure if those without skin in the game should be allowed to engage in CDSs either. I'm far from an expert, and there's a lot to think thru, so it's just my gut reaction right now.

As for those that make the relevant decisions - I fear they and their institutions are captured. We would have seen meaningful changes by now.
 
Quote from Misthos:

Agreed. The notional numbers are defintitely more sizzle than steak, but hey, that's what sells. And there are a lot of different types of derivatives - it's far from being a monolithic form of financial engineering.

Nonetheless, when it comes to the CDS market - in my view it needs regulation and transparency - an exchange. And I'm not so sure if those without skin in the game should be allowed to engage in CDSs either. I'm far from an expert, and there's a lot to think thru, so it's just my gut reaction right now.
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Agree 100% and it's already happening in the CDS and IRS mkts, as I alluded in another thread... Also, sadly, agree re powers that be.

I just hate sloppy, lazy, sensationalist journalism.
 
Agreed. The notional numbers are defintitely more sizzle than steak, but hey, that's what sells.
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The quote below form the SEC director of enforcement.

"The Structured and New Products Unit will focus on complex derivatives and financial products, including CDS, CDOs and securitized products. These are huge markets, with outstanding notional amounts that at one time came close to the market capitalization of all publicly traded companies in the world."

http://sec.gov/news/speech/2009/spch080509rk.htm

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We are here on a lowly message board discussing the merits of numbers and the people in charge are stroking each other.
 
Quote from Martinghoul:

Agree 100% and it's already happening in the CDS and IRS mkts, as I alluded in another thread... Also, sadly, agree re powers that be.

I just hate sloppy, lazy, sensationalist journalism.
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Now we know where the journalists get their information, the SEC. This is probably a feedback loop.
 
Quote from nutmeg:

Now we know where the journalists get their information, the SEC. This is probably a feedback loop.
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It just illustrates something that should really be obvious to us. Namely, that in politics, as well as in journalism, loud sizzle sells a lot better than steak. We've seen it time and time again (my recent favorite is still the $23.7trn TARP figure). Shouldn't come as a surprise, really, as both operate on the same premise and target the same audience. It's just that our expectations where public servants are concerned are inexplicably so much higher. God knows why...
 
The Alphabet Soup of Structured Finance Introduction :

http://video.google.com/videoplay?docid=2492293554458005955

Structured Finance - Credit Derivatives, Part I:

http://video.google.com/videoplay?docid=2479343279214065867

Structured Finance - Credit Derivatives, Part 2

http://video.google.com/videoplay?docid=-8828129006600999542&hl=en

Structured Finance - Credit Default Swaps :

http://video.google.com/videoplay?docid=-1596267321681457618

Structured Finance - Securitization:

http://video.google.com/videoplay?docid=3211508673100647603
 
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