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Credit Default Swap Market Tanks As Wall Street Eyes New Regulations

First Posted: 11/29/10 12:03 PM ET Updated: 05/25/11 07:15 PM ET

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Wall Street

Bloomberg:

Trading in credit-default swaps, Wall Street's fastest-growing business before the credit crisis, has tumbled 40 to 60 percent from three years ago as banks prepare for new regulation of derivatives.

Read the whole story: Bloomberg

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Trading in credit-default swaps, Wall Street's fastest-growing business before the credit crisis, has tumbled 40 to 60 percent from three years ago as banks prepare for new regulation of derivatives. ...
Trading in credit-default swaps, Wall Street's fastest-growing business before the credit crisis, has tumbled 40 to 60 percent from three years ago as banks prepare for new regulation of derivatives. ...
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jo smith456
238 Fans
10:02 PM on 11/29/2010
The investment-banks are just playing it cool until such time that wall street lobbyists' efforts to ensure that the interpretation of the derivative-provisions of the Financial Reform law, is on their (investment-banks/ hedge funds) side!!! They're just being smart...too smart to fool the majority of Americans...
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Half-Alien
47 Fans
04:15 PM on 11/29/2010
Whew... I thought the profitable bet was Boise State Football.
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DiogenesOfAlaska
Mitt Romney for president - of the Cayman islands!
340 Fans
03:01 PM on 11/29/2010
The headline is misleading. The market didn't 'tank', it became smaller in volume. That's a big difference. It's also true that this means that the big players will reap fewer profits from this market, as far as profit is driven by volume alone. But that's the part of profits that shouldn't exist in the first place.

The 'tanking' is the simple result of the need to increase disclosure and move large parts of the business to clearinghouses. It is exactly what was to be expected from the new rules, and it's not a bad sign at all.
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Steve Rockett
9982 Fans
 
01:51 PM on 11/29/2010
The value of the dollar is rising on the weak European economy. Yet the market drops. To me this makes no sense, especially when the value of gold is going up. To my way of thinking a stronger dollar may lower exports, but they represent only 15% of our economy. This should be cause for cheer on Wall Street and increase in long term investing. In addition, store sales are up dramatically year over year. I like a strong dollar, because it means we have more buying power and our property values go up.
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O Dannyboy
240 Fans
01:32 PM on 11/29/2010
Halleluja.

Maybe now they will let a few dollars trickle into real investments in real businesses which create real (job-creating) wealth, in lieu of the legalized casino gambling known as credit default swaps.

Three cheers for the positive power of government regulation!
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Steve Rockett
9982 Fans
 
01:52 PM on 11/29/2010
Good call. Let's get O Dannyboy up over 50 fans today.
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Silverwolf72
Are We There Yet?
217 Fans
03:42 PM on 11/29/2010
Having such a large part of the economy based on gambling was plain crazy!
Fanned
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O Dannyboy
240 Fans
03:59 PM on 11/29/2010
I read somewhere that, before the crash, there was actually more money tied up in that travesty than there was invested in actual businesses (including the business of mortgage loans).

A couple of generations ago, bankers took deposits, invested the money (in actual business ventures), paid a bit of interest to depositors and still were some of the richest people in town.

Now that isn't good enough. Now they have to be the richest of the rich people in Richville, Ironically, they managed that by to a great extent abandoning actual wealth-creation. Furthermore, as worker productivity has risen for the past decade, *none* of the rewards (of any statistical significance) have gone to anyone outside the top 2%.

I'm cool with there being a range of economic classes. But I think we can prevent innocent children from needless hunger and illness at the bottom by taxing and regulating the zillionares out of existence at the top.
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