Counterparties

By Felix Salmon
April 26, 2010
HuffPo

" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

Larry Summers Defends Megabanks, Says Too Many Small Banks Make U.S. ‘Less Stable’ — HuffPo

Do those derivatives end-users just want to avoid taxes? — Time

Waldman helpfully takes Abacus apart. I simply don’t believe that ACA Capital really knew what it was insuring — Interfluidity

Why Goldman’s ‘Big Boy’ defense won’t work — WSJ

One hundred trillion dollars — Guan

The Worst Physics Article Ever — Science Blogs

I’ve been saying for years that most people are better off buying a Mac than AAPL stock. Seems I was wrong — Kyle Conroy

iPad not bad for your eyes, but is it bad for your sleep? — LAT

The covered bond industry is miffed about Basel — Alphaville

NYT blogger complains about being quoted and linked to — NYT

Rajat Gupta, GS board member and insider trader? This is the last thing Goldman needs right now — WSJ

Dambisa Moyo appointed to Barclays Board — Barclays

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
Comments
4 comments so far

Simple way to call the bluff on the ‘end users’ of derivatives who don’t want to pony up variation margin on their swaps:

1) Have them sign a document that states that should their swap counterparty bank fail, they will not seek remedies from the FDIC, Fed, Tsy, other taxapayer supported resource to make good any losses

2) Have the banks sign a similar document that the obligations of clearing houses in which they have equity (e. g., ICE Trust) and swaps for which they don’t collect variation margin are obligations of non-bank subsidiaries and not guaranteed by the FDIC insured institution.

Free market advocates like Jamie Dimon and LLoyd Blankfein would be standing in line to sign those documents along with all those end users who hate government regulation.

Posted by longandshort | Report as abusive

Regarding Scott James’ NYT rant, I simply don’t know what to say. At best it’s pining over a world long gone. At worst it’s a trip down Irrelevant Lane. I should bill him for the three minutes it took me to read it.

Posted by Curmudgeon | Report as abusive

It’s neat that the $100,000,000,000,000 banknote has an anti-counterfeiting feature. Does that make it more valuable or less valuable?

Posted by MattF | Report as abusive

Curmudgeon: Scott James’ lament was hardly a rant. Stossel’s failure to identify the source of his post is poor craftsmanship and laziness at the very least, and a conscious effort to mislead readers at worst. Fact is, he didn’t report any of the facts in the matter and should have done so. The invention of a new medium doesn’t erase well-established, valuable and necessary standards of conduct. Fox News makes up enough phony “facts” as it is. When it is actually using real facts that it did not find and verify on its own, it owes an *explicit* hat tip to those who actually did the work. If only as a matter of common courtesy. Not that one finds much of that on Fox, either….

Posted by Citoyen | Report as abusive
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/