Post by jeffolie on Jun 16, 2011 12:54:19 GMT -6
gold/silver rules delayed & Greece default CDSs
The big, financial elites won by delaying any chance of changing the rules against them in the $600 Trillion derivative market that includes gold and silver rules.
Who is in theory the new regulator: the CTFC...but they are captured by financial elites that do not want to lose.
Banks in Germany, France, America are 'counterparties' to derivatives ... they do not want to lose ... Greece default would likely make them lose maybe $6 Billion if the derivatives were to be enforced as they appear on the surface.
===================================================
"... a Greek default could “tip the fragile funding market for major European banks.”
"...The CFTC, which must write regulations to cover dozens of complex reforms for the $600 trillion global swaps markets, has missed a series of deadlines for finalizing them.
"...until as late as December 31, or until the agency has finalized corresponding rules. The agency plan would grant temporary relief from the new guidelines for certain transactions in exempt or excluded markets -- primarily in financial, energy and metals.
"....some three years after credit default swaps played a crucial role in bringing financial markets -almost- to their knees, nothing has really changed at all. There's still no serious regulation for them. There are attempts and proposals, but the banks that would be most affected by any regulation that could at least try to protect the public from future financial crises, still have the power to delay any such plans, seemingly forever.
"...Now, you can downgrade French and Greek banks on account of their Greek debt exposure, and soon do the same with German, Dutch, Belgian and American ones, but that's not the issue at hand. To really assess the risks, you would have to look into that part of the $600 trillion (it could easily still be $1 quadrillion too) derivatives market that deals with bets on Greek debt. What does SocGen hold in swaps on Greek debt? is a much better question than what it holds in Greek bonds. But that question is not answered today, and if banks and politicians have any say in it, won't be for a long time to come.
"....And that in turn makes a potential Greek restructuring, reprofiling, default-driven credit event an interesting, albeit somewhat scary, notion. Simply because it may force part of the derivatives market into the open. The main problem with this is that CDS were never meant to pay out. They were just a way to get debts and liabilities off the banks' books, and to free up capital that would otherwise have to be used as required reserves, just sitting there and unavailable for gambles and wagers.
"....The CDS market may be no larger than 10% of the total derivatives outstanding, say, $60 trillion, but that's still more than enough for some real "fun". And maybe we'll get to see some of the sellers and counterparties in this shady universe we're not allowed to know anything about, but whose losses end up on our plates regardless. It's high time. Unless we get serious about this stuff, it’s set to bankrupt all of us. And I'll say it again: the protesters in the streets of southern Europe may be our best chance of finding out; politicians and bankers won't volunteer the information.
theautomaticearth.blogspot.com/
The big, financial elites won by delaying any chance of changing the rules against them in the $600 Trillion derivative market that includes gold and silver rules.
Who is in theory the new regulator: the CTFC...but they are captured by financial elites that do not want to lose.
Banks in Germany, France, America are 'counterparties' to derivatives ... they do not want to lose ... Greece default would likely make them lose maybe $6 Billion if the derivatives were to be enforced as they appear on the surface.
===================================================
"... a Greek default could “tip the fragile funding market for major European banks.”
"...The CFTC, which must write regulations to cover dozens of complex reforms for the $600 trillion global swaps markets, has missed a series of deadlines for finalizing them.
"...until as late as December 31, or until the agency has finalized corresponding rules. The agency plan would grant temporary relief from the new guidelines for certain transactions in exempt or excluded markets -- primarily in financial, energy and metals.
"....some three years after credit default swaps played a crucial role in bringing financial markets -almost- to their knees, nothing has really changed at all. There's still no serious regulation for them. There are attempts and proposals, but the banks that would be most affected by any regulation that could at least try to protect the public from future financial crises, still have the power to delay any such plans, seemingly forever.
"...Now, you can downgrade French and Greek banks on account of their Greek debt exposure, and soon do the same with German, Dutch, Belgian and American ones, but that's not the issue at hand. To really assess the risks, you would have to look into that part of the $600 trillion (it could easily still be $1 quadrillion too) derivatives market that deals with bets on Greek debt. What does SocGen hold in swaps on Greek debt? is a much better question than what it holds in Greek bonds. But that question is not answered today, and if banks and politicians have any say in it, won't be for a long time to come.
"....And that in turn makes a potential Greek restructuring, reprofiling, default-driven credit event an interesting, albeit somewhat scary, notion. Simply because it may force part of the derivatives market into the open. The main problem with this is that CDS were never meant to pay out. They were just a way to get debts and liabilities off the banks' books, and to free up capital that would otherwise have to be used as required reserves, just sitting there and unavailable for gambles and wagers.
"....The CDS market may be no larger than 10% of the total derivatives outstanding, say, $60 trillion, but that's still more than enough for some real "fun". And maybe we'll get to see some of the sellers and counterparties in this shady universe we're not allowed to know anything about, but whose losses end up on our plates regardless. It's high time. Unless we get serious about this stuff, it’s set to bankrupt all of us. And I'll say it again: the protesters in the streets of southern Europe may be our best chance of finding out; politicians and bankers won't volunteer the information.
theautomaticearth.blogspot.com/