{"id":8596,"date":"2008-09-22T03:58:59","date_gmt":"2008-09-22T03:58:59","guid":{"rendered":"http:\/\/127.0.0.1\/site\/2017\/2\/1985\/kendall_harmon_who_cares_about_the_credit_default_swaps_market\/"},"modified":"2008-09-22T03:58:59","modified_gmt":"2008-09-22T03:58:59","slug":"kendall_harmon_who_cares_about_the_credit_default_swaps_market","status":"publish","type":"post","link":"https:\/\/kendallharmon.net\/?p=8596","title":{"rendered":"Kendall Harmon: Who Cares About the Credit Default Swaps Market?"},"content":{"rendered":"<p><i>All of us should.  Below, John Mauldin wrote:<\/i><\/p>\n<blockquote><p>We absolutely must move credit default swaps to a regulated exchange, no matter how much investment banks and hedge funds scream. Must be done. Do it now. Real rules about writing mortgages, although now that losses are in the hundreds of billions, underwriting rules are already becoming quite restrictive.\u201d\u009d<\/p><\/blockquote>\n<p><i>I cannot possibly tell you how important this is.  Jim Chanos said something similar earlier in the week on CNBC.  If I had to recommend ONE thing in what Congress and our national leadership does in the package they put together this week, it would be this.  Remember: the few somewhat intelligent commentators this week on the crisis noted that the bond market is WAY bigger than the stock market, and was much more at the center of the real storm (see, e.g. Henry Paulson below).<\/p>\n<p>Well, the CDS market is WAY, WAY bigger than the bond market.  And it played a huge role\u201d\u201dhuge\u201d\u201din the exponential expansion of debt.  And as we speak, someone like JP Morgan\u201d\u201dright now\u201d\u201dis expanding their off book CDS exposure by at least 150 billion\/quarter.<\/p>\n<p>We do not just need a regulated CDS market.  We need a carefully thought through cessation of the huge off book CDS paired nonsense that is currently being undertaken and will continue to be undertaken by our financial institutions.<\/p>\n<p>At lease one NY times reporter was somewhat onto the story.  Please take the time to read Gretchen Morgenson&#8217;s articles <a href=\"http:\/\/www.iht.com\/bin\/printfriendly.php?id=15138610\">here<\/a> and <a href=\"http:\/\/www.nytimes.com\/2008\/02\/17\/business\/17swap.html?pagewanted=print\">there<\/a>.<\/p>\n<p>I find it simply incredible that this market is not being addressed under the current &#8220;plan.&#8221;<\/p>\n<p>By the way, one of my very knowledgeable friends who has lots of industry ties thinks the current CDS market is now in the range of 90 trillion dollars (I think that is high, and it is more like 60-70 trillion, but no one really knows exactly). That\u2019s up from $900 billion in 2000. <a href=\"http:\/\/www.dirksencenter.org\/print_emd_billionhere.htm\">Everett Dirksen<\/a> would know that is a lot of money&#8211;KSH.<\/i><\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>All of us should. Below, John Mauldin wrote: We absolutely must move credit default swaps to a regulated exchange, no matter how much investment banks and hedge funds scream. Must be done. Do it now. Real rules about writing mortgages,<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/kendallharmon.net\/?p=8596\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":794,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8596","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/kendallharmon.net\/index.php?rest_route=\/wp\/v2\/posts\/8596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kendallharmon.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kendallharmon.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kendallharmon.net\/index.php?rest_route=\/wp\/v2\/users\/794"}],"replies":[{"embeddable":true,"href":"https:\/\/kendallharmon.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8596"}],"version-history":[{"count":0,"href":"https:\/\/kendallharmon.net\/index.php?rest_route=\/wp\/v2\/posts\/8596\/revisions"}],"wp:attachment":[{"href":"https:\/\/kendallharmon.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kendallharmon.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kendallharmon.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}