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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (21209)	6/28/2003 9:06:11 PM
From: stockman_scott	Respond to of 89467

From Doug Noland prudentbear.com “On April 3, J.P. Morgan Chase & Co. held a conference in Manhattan, drawing about a thousand people to discuss one of the fastest-growing and least understandable financial markets in the world: credit derivatives. ‘We outgrew the Waldorf and had to go to the Sheraton Towers,’ says Andy Brindle, global head of credit derivatives at J.P. Morgan. ‘Next year, we’ll have to go to Madison Square Garden, I think.’ …The global credit derivatives market, which wasn’t even tracked until 1997, has ballooned to $2 trillion based on the so-called notional value of the debts that underlie the contracts, according to Fitch…That market, Fitch predicts, will grow to $4.8 trillion by next year. The entire derivatives market -- including transactions based on stocks, bonds, loans, commodities, currencies and mortgages -- has a notional value of about $100 trillion, according to the International Swaps and Derivatives Association. Those numbers are only guesses. Nobody knows how much money is actually at risk. Banks don’t have to report the details of their exposure, which leaves regulators in the dark. ‘This market is completely unregulated,’ says Randall Dodd, director of the Derivatives Study Center, a nonprofit research organization in Washington, and a former economist at the Commodity Futures Trading Commission. ‘No reporting requirements, no collateral requirements, no licensing of traders,’ Dodd says. ‘There’s no supervision of this activity. Even if you’re a regulator and you want to see what’s happening, you can’t.’”