I have never said that outlawing OTC derivatives or the CDS's was necessary, recommended, or required. If the regulation recommended by Brooksley Born had been implemented then they would have discovered that not only the Bonds held by the GSEs but the private sector OTCs and CDSs too were all at risk because of the risky sub prime loans and the ARMs.
So go back a couple of decades and we have the Junk Bonds and the Savings and Loan scandals. After that all the elected officials came out and said that this will never happen again. It only took them 20 years to go from Junk Bonds to bonds made of junk.
You must know that the SEC monitors for inside trading? All Brooksley Born requested was that there was someone to investigate and prosecute shady dealings in the hidden OTC market. Last time I checked, you can't go public secretly and with a Ponzi scheme as a prospectus. Although that never stopped Bernie Madoff.
It looks like staying away from Wikipedea has not prevented you from being in error. Brooksley Born did not want to kill the OTC market.
Well that's a relief.
If the regulation recommended by Brooksley Born had been implemented
Which regulation did she recommend? Be as precise as you can.
then they would have discovered that not only the Bonds held by the GSEs but the private sector OTCs and CDSs too were all at risk because of the risky sub prime loans and the ARMs.
Imagine two banks. One buys $500 million in mortgage bonds and uses a CDS. The other buys $500 million in mortgage bonds and does not use a CDS.
How does the existence of the CDS prevent the non-CDS bank from discovering the risk of the bonds?
Pretend CDS did not exist, how does that make the risk of the mortgage bonds more easily discovered?
Last time I checked, you can't go public secretly
Last time I checked, CDS are not traded on an exchange (which is kinda what it means to "go public").
It looks like staying away from Wikipedea has not prevented you from being in error.
Where do you imagine I was in error? Be as specific as you can.