CDS

Hear Comes the Hearings - Investigations Start on Credit Default Swaps

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U.S., Cuomo Open Credit Default Swap Investigation:

The U.S. government and New York Attorney General Andrew Cuomo opened a joint investigation into the $34.8 trillion credit-default swap market, the top federal prosecutor in New York said

Might be a scapegoat witch hunt though for they are targeting short sellers.

New York Times:

Mr. Cuomo and Mr. Garcia are investigating whether investors drove up the price of swaps in transactions that were reported to data providers but never actually completed, according to people briefed on the investigation. If so, that would have helped anybody who sold short financial shares. In a short-sale, investors sell stocks they do not own in the hopes of buying them back later at a lower price.

Fed Setting Up Credit Default Swap (CDS) Auction Market

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Shocking, true. Here Comes The Light. Although the details are not known, how much transparency and regulation will exist, the actual Fed meeting is tomorrow. CNBC is reporting that the Fed is setting up a credit default swap auction.

Officials at the Federal Reserve plan to meet with top executives from two commodities exchanges in an effort to create a new marketplace for credit default swaps, one of the most important, controversial and opaque securities traded on the Wall Street, CNBC has learned.

The meeting, scheduled to be held as early as Tuesday of this week at the headquarters of the New York Fed, is expected to clear the way for the creation of a new clearing house, or exchange, where CDSs can be traded with more transparency and with a degree of government oversight.

Cox Wakes Up? - SEC Chair Says Credit Default Swaps Must be Regulated....Now!

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Rip Van Winkle
Rip Van Winkle SEC Chairman Cox magically sees the light.

CDSes Must Be Regulated:

U.S. Securities and Exchange Commission Chairman Christopher Cox said Congress should grant authority to regulate the credit-default swaps market amid concern the bets are helping fuel the global financial crisis.

Lawmakers should ``provide in statute the authority to regulate these products to enhance investor protection and ensure the operation of fair and orderly markets,'' Cox told the Senate Banking Committee today at a hearing in Washington.

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