shopyield.com

The derivatives news is flowing out… everyone is focused on the problem and pushing solutions… excellent… this monster will likely not be slayed but will suffer severe damage… keep beating friends…

• “Creditex and Markit today announced the compression of $1.036 trillion in notional value of credit default swap (CDS) transactions since the successful launch of a coordinated programme of multilateral trade terminations in August this year.”
• Vanilla CDS counterparty clearing is being addressed (best place to start) ~~~ “Exchanges CME/Citadel, ICE, NYSE Euronext and Eurex have responded to the call, and all hope to provide a counterparty clearing solution by way of an exchange model. The exchanges can be the watchful “eye in the sky” of firms trading at their venues, providing risk management and facilitating the efficient use of trading firm collateral. NetDelta, on the other hand, is proposing a counterparty clearing solution that does not rely on mutualizing risks. Whichever clearing solutions are adopted, they will work best for fungible, “vanilla” structures with widely followed underlying reference assets.”
• Global regulatory coordination (très brillant) “Securities regulators are “taking urgent action to coordinate global regulatory measures aimed at abusive short selling, including reporting requirements for short positions and trading activity,” SEC Chairman Christopher Cox said in a statement…. IOSCO… met via teleconference earlier on Monday to discuss urgent regulatory issues in the ongoing credit crisis… Cox is the chairman of IOSCO’s technical committee and organized Monday’s meeting…. the SEC said a second working group will examine ways to “introduce greater transparency” and supervision to unregulated markets, such as the over-the-counter markets for derivatives, which have been blamed for worsening the financial crisis.”
• Good sign… ISDA and SIFMA oppose Senator Harkin’s bill… “Legislation that would require swaps and other over-the-counter derivatives to be traded on an exchange is overreaching and would thwart the use of the products to hedge risk, officials from two industry groups said Friday…Representatives of the ISDA and the SIFMA were reacting to the Derivatives Trading Integrity Act, introduced Thursday by Sen. Tom Harkin, D-Iowa, to bring the massive over-the-counter, or OTC, derivatives market under federal regulation.”
• Geithner being promoted… hopefully his successor will feel free to use a big stick on the dealer beast…