Derivatives: Darth Vader's Revenge Message Board

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Non-Tech : Derivatives: Darth Vader's Revenge

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To: Hawkmoon who wrote (1531)	3/15/2010 8:22:25 AM
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CFTC Chair Gary Gensler Addresses Markit OTC Derivatives Markets Conference [The double whammy - shoddy securitized packages, supposedly "insured" by CDS. Insure a fraud?] -SNIP- "Asset Securitization Lastly, credit default swaps also played a significant role in how mortgage and other asset securitizations were done leading up to the crisis. Though CDS at first was promoted as an important market innovation, their development ultimately contributed to lower underwriting standards. Investment banks and other packagers of mortgages wrapping securities with credit protection for sale to investors could reduce their efforts in analyzing the risk that due diligence would otherwise require. The crisis certainly shows the disastrous effects of investors and underwriters relying far too heavily on this protection. It is important that reform enable the CFTC and SEC to write rules to establish recordkeeping and reporting rules as well as business conduct standards to help address these risks." blogs.wsj.com Jim

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