tomato can Posted July 16, 2012 Share Posted July 16, 2012 He says the LIBOR scandal is huge! http://finance.yahoo.com/blogs/daily-ticker/libor-scandal-huge-eliot-spitzer-132610929.html Link to comment Share on other sites More sharing options...
ACor58 Posted July 16, 2012 Share Posted July 16, 2012 He is right. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted July 16, 2012 Share Posted July 16, 2012 The derivatives market is about to take a big sloppy **** on the whole world. Link to comment Share on other sites More sharing options...
DC Tom Posted July 16, 2012 Share Posted July 16, 2012 The derivatives market is about to take a big sloppy **** on the whole world. Again Link to comment Share on other sites More sharing options...
meazza Posted July 16, 2012 Share Posted July 16, 2012 The derivatives market is about to take a big sloppy **** on the whole world. 1) Create a centralized clearing house for standard OTC products 2) Any institution holding on to exotic derivatives should have to put up a larger collateral requirement. End of story. Link to comment Share on other sites More sharing options...
DC Tom Posted July 16, 2012 Share Posted July 16, 2012 1) Create a centralized clearing house for standard OTC products Then they're not OTC. I have a very hard time believing that manipulating LIBOR is a new development. Maybe getting caught is... Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted July 16, 2012 Share Posted July 16, 2012 Again No... that first time, relatively speaking, was a small involuntary discharge. A "shart" if you will. This time we're going to get the whole colon. Link to comment Share on other sites More sharing options...
meazza Posted July 16, 2012 Share Posted July 16, 2012 Then they're not OTC. I have a very hard time believing that manipulating LIBOR is a new development. Maybe getting caught is... Most OTC products are under the umbrella of ISDA yet are still confirmed legally and have counter party risk. There's no reason why these products that are becoming more and more standardized can't pass through a clearing house. I agree with your second point. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted July 16, 2012 Share Posted July 16, 2012 (edited) 1) Create a centralized clearing house for standard OTC products 2) Any institution holding on to exotic derivatives should have to put up a larger collateral requirement. End of story. DC Tom's point stands, although fails to address the large probability that most houses are holding the same positions, and that they don't have anywhere near enough capital to protect against failure in that market. http://seekingalpha.com/article/301260-bank-of-america-dumps-75-trillion-in-derivatives-on-u-s-taxpayers-with-federal-approval Edited July 16, 2012 by TakeYouToTasker Link to comment Share on other sites More sharing options...
DC Tom Posted July 16, 2012 Share Posted July 16, 2012 Most OTC products are under the umbrella of ISDA yet are still confirmed legally and have counter party risk. There's no reason why these products that are becoming more and more standardized can't pass through a clearing house. Except that then they're not OTC. Which is not necessarily to disagree with you - I DO disagree, but that's not the point. The point is: you're suggesting a fundamental redefinition of the nature of the OTC market, which, even if it's possible, is probably not practical (on the basis that, if you change the OTC market so it's no longer decentralized, another decentralized market will probably pop up to take its place.) Link to comment Share on other sites More sharing options...
meazza Posted July 16, 2012 Share Posted July 16, 2012 DC Tom's point stands, although fails to address the large probability that most houses are holding the same positions, and that they don't have anywhere near enough capital to protect against failure in that market. Yes chances are if it would happen, the firms with the largest risk would obviously have to dump more into collateral to meet the margin requirements and it would definitely hurt them in the short term. Except that then they're not OTC. Which is not necessarily to disagree with you - I DO disagree, but that's not the point. The point is: you're suggesting a fundamental redefinition of the nature of the OTC market, which, even if it's possible, is probably not practical (on the basis that, if you change the OTC market so it's no longer decentralized, another decentralized market will probably pop up to take its place.) I have to do some research on my end as I do recall some OTC guys I work with stating that there would be some sort of centralized method of trading the more standard products but I don't remember the details. Link to comment Share on other sites More sharing options...
/dev/null Posted July 16, 2012 Share Posted July 16, 2012 And before somebody comes along with the inevitable Capitalism failed so the government should step in, I ask... What did Timmy Tax Cheat know. And when did he know it? http://www.huffingtonpost.com/2012/07/10/timothy-geithner-barclays-libor_n_1662389.html Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted July 16, 2012 Share Posted July 16, 2012 (edited) Yes chances are if it would happen, the firms with the largest risk would obviously have to dump more into collateral to meet the margin requirements and it would definitely hurt them in the short term. No amount of collateral that they could post, even assuming they would post 100% of their capital, can touch the real requirements. And before somebody comes along with the inevitable Capitalism failed so the government should step in, I ask... What did Timmy Tax Cheat know. And when did he know it? http://www.huffingtonpost.com/2012/07/10/timothy-geithner-barclays-libor_n_1662389.html Capitalism didn't fail. The world hasn't been anything remotely resembling capitalist for a very long time. Edited July 16, 2012 by TakeYouToTasker Link to comment Share on other sites More sharing options...
/dev/null Posted July 16, 2012 Share Posted July 16, 2012 Capitalism didn't fail. The world hasn't been anything remotely resembling capitalist for a very long time. Link to comment Share on other sites More sharing options...
Cinga Posted July 17, 2012 Share Posted July 17, 2012 No amount of collateral that they could post, even assuming they would post 100% of their capital, can touch the real requirements. Capitalism didn't fail. The world hasn't been anything remotely resembling capitalist for a very long time. THIS!!!! let me repeat it!!! Capitalism didn't fail. The world hasn't been anything remotely resembling capitalist for a very long time. Is the biggest truth I have ever read on this board!!! Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted July 17, 2012 Share Posted July 17, 2012 So when was the last time the world was remotely capitalistic? Give me a rough year or so. Should we go back to those days? Link to comment Share on other sites More sharing options...
TPS Posted July 17, 2012 Share Posted July 17, 2012 So when was the last time the world was remotely capitalistic? Give me a rough year or so. Should we go back to those days? 1776. Link to comment Share on other sites More sharing options...
Cinga Posted July 17, 2012 Share Posted July 17, 2012 1776. right answer, except he asked if we should go back to those days.... My answer.... If it takes that kind of action, yes, I'm all in.... Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted July 17, 2012 Share Posted July 17, 2012 1776. LOL...... Link to comment Share on other sites More sharing options...
TPS Posted July 17, 2012 Share Posted July 17, 2012 right answer, except he asked if we should go back to those days.... My answer.... If it takes that kind of action, yes, I'm all in.... I wasn't referring to independence, though it would take a revolution to create conditions for the market system to work again. Answer: impossible to go back. Link to comment Share on other sites More sharing options...
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