Posted on 07/14/2009 4:51:41 PM PDT by FromLori
The US Department of Justice has started investigating a data provider and dealers in the credit derivatives market for potential violations of the US Sherman Act, which prohibits abuses of monopoly power or other forms of collusion.
Demands were sent to more than a dozen dealers for several years’ of detailed information about trading and pricing, according to people who received the letter. The DoJ letter was sent to banks with an equity stake in Markit Group, which provides pricing data on markets including the credit default swaps (CDS).
The move comes as the regulatory spotlight shines on the CDS market and other privately traded derivatives markets, parts of which grew dramatically in the last decade and generated huge profits for Wall Street.
Markit, which has also been asked for information, has developed many of the most closely watched derivatives pricing benchmarks for CDS such as the mortgage sector’s ABX and the corporate credit CDX and iTraxx Europe indices.
According to people who have seen the letter from the DoJ’s antitrust division, the requests are made under sections one and two of the Sherman Act. The DoJ declined to comment.
Markit said that it “has been informed of an investigation by the Department of Justice into the credit derivatives and related markets. We will work with the Department to provide any information requested.”
Shareholders in Markit include JPMorgan Chase, Goldman Sachs, Citigroup, Deutsche Bank, Bank of America and Morgan Stanley, among others. Banks either declined to comment or were not available for comment.
The DoJ started looking into Markit last year when it sought approval for a joint venture with the Depository Trust and Clearing Corp that would combine their respective front and back office operations for processing and confirming derivative transactions. The new company is awaiting regulatory approval.
(Excerpt) Read more at ft.com ...
“The obamageddon will shut this down you can count on it”
If he does, add 2 trillion to the bailout (conservative estimate)
http://www.rgemonitor.com/financemarkets-monitor/256551/collateral_use_increases_by_86_to_4_trillion http://www.reuters.com/article/fundsFundsNews/idUSN0939714920090609 http://www.intent.com/blog/2008/09/29/stop-a-financial-bomb Derivatives were illegal in the United States between 1936 and 1983.
Yep.
I actually agree with their investigation into this. The problem with the current credit crisis can be traced back to certain events that happened within the last decade. Two of the big ones included:
The 1999 legislation spearheaded by Phil Gramm and signed into law by President Clinton — the Gramm-Leach-Bliley Act. The Act is most widely known for repealing portions of the Glass-Steagall Act, which had regulated the financial services industry.
The passage of the Commodity Futures Modernization Act of 2000, which kept derivatives transactions, including those involving credit default swaps, free of government regulation.
Credit default products are the most commonly traded credit derivative product and include unfunded products such as credit default swaps and funded products such as collateralized debt obligations.
My opinions about the need for regulation of the CDS market is not about politics. Its about making sure we have the proper safegards to keep companies like JPMorgan Chase, Goldman Sachs, Bank of America, Merrill Lynch, and Morgan Stanley from wrecking the US economy and causing millions of job losses again. They have utterly failed once again to prove they can be trusted to run their businesses with integrity and ethics. These major institutions engaged in and/or facilitated fraud. The same garbage that occured during the S&L crisis.
No need. The government can declare force majeure and be done with it. The sellers are told to return premiums to the buyers, the contracts voided and we go back to the status quo ante.
As soon as these banks started accepting money from Uncle Sugar, they signed up for the full ride.
Were I running the show, I’d be asking “You asked for socialism. That’s what we gave you. Now then, in which ear would you like the bullet, Comrade Banker?”
Thank you I also would agree with it but you put it much better than I could. I just do not see tax cheat tim allowing that to happen. They are already screaming.
“Were I running the show, I’d be asking “You asked for socialism. That’s what we gave you. Now then, in which ear would you like the bullet, Comrade Banker?”
Bingo!
LOL!
The Man From Goldman Sachs.
I like that lol
Did you see American Thinkers Article?
http://www.americanthinker.com/2009/07/will_dems_allow_goldman_to_man.html
So those running the major financials will tell the politicians that they need to keep the information away from the public or everything will collapse. If they understand how bad it is, they'll run for the exits, etc, etc.... Thus the coverup occurs due to a mixture of blackmail and protecting their own careers. And the majority of those who really suffer from all this end up being not even involved.
Thanks, Lori.
So your investment advice is? (please advise):
A. Stocks (foreign or domestic)
B. Currency (foreign or domestic)
C. Gold
D. Silver
E. Lead and brass
F. Goats and sheep
G. Rice and beans
But financials did just finish a multi month rally and I think they are a bit over priced right now given how long its going to take to get over the recession. I also like Canadian financials and energy companies. The Canadian financials dodged a lot of the credit crisis mess and are still quite healthy. I continue to love Apple Computer. They just continue to kick butt. Stay away from healthcare. Too much unknowns with Obamacare being pushed. Stay away from heavy manufacturing as well.
Currency? I would stay far away from the US dollar along with the Euro. Asian currencies are the only ones I think could have upside right now.
I think the commodities boom is over for some time. Gold is looking a bit over priced right now at around 900.
As for goats, sheep, rice, and beans. Everyone still needs to eat, even though its a recession, but not sure how to properly invest in those. ;)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.