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HP LaserJet P10006 (3)

MF Global - once mostly a Futures Broker and more recently a budding full-service Investment Bank run by ex-Governor/ex-Senator Jon Corzine has collapsed following ratings downgrades on the back of large losses on Eurozone Sovereign Debt. Trades that Corzine himself oversaw. It will be the 8th largest Bankruptcy in US History. Much of the blame is being placed on Corzine's efforts to recreate his old firm, Goldman Sachs. He was forced out as Goldman CEO post IPO by none other than Hank Paulson - the Secretary of Treasury who oversaw the creation of TARP. [more inside]
posted by JPD on Nov 1, 2011 - 41 comments

The World Development Movement (WDM) published a report six months ago on How Banking Speculation Causes Food Crises. It describes why the deregulation of commodity derivatives, specifically food commodity derivatives, has led to a state of global instability in the price of food. Political instability in the Middle East is not helping either. The European Commission is considering methods to introduce regulation in commodity derivative markets [Strategy Outline PDF]. In the meantime, speculators gonna speculate. [more inside]
posted by lemuring on Mar 5, 2011 - 26 comments

When we write this up, I'll guarantee you, before the ink is dry, some 22-year-old is going to come out and figure six different ways to get around what I've just written. Senate Banking Committee Chairman Chris Dodd on the proposed Restoring American Financial Stability Act [.pdf] [more inside]
posted by HP LaserJet P10006 on Apr 22, 2010 - 37 comments

Tonight on PBS, Frontline airs a new investigative report entitled The Warning (sneak peaks 1 & 2), which profiles Brooksley Born, who (as head of the CFTC from '96-'99) was almost alone among regulators in warning of the potential dangers of derivatives.
posted by HP LaserJet P10006 on Oct 20, 2009 - 34 comments

Last week the House Committee on Financial Services approved legislation to regulate derivatives. Some critics contend that the legislation does not go far enough, and there is fear that there are too many exemptions to the rules: reforming the $42 trillion market for credit swaps is crucial if taxpayers are to be protected from future rescues of institutions deemed not only too big but also too interconnected to fail. [more inside]
posted by HP LaserJet P10006 on Oct 18, 2009 - 25 comments

President Obama has announced he will seek broad new authority to regulate the financial derivatives markets. As has been discussed many times previously here on the blue, the massive unregulated financial derivatives markets (estimated to be in excess of hundreds of trillions of dollars in overall scale) have been one of the major contributing and complicating factors in the current global financial crisis. [more inside]
posted by saulgoodman on May 13, 2009 - 43 comments

Nationalize. Reorganize. Decentralize. anewwayforward.org wants you to organize a protest on April 11^th to express your frustration and disapproval with how our elected officials have handled the economic crisis.
posted by geos on Mar 17, 2009 - 62 comments

"As no rational agent would be willing to take part in the last round in a finite economy, it is difficult to design Ponzi schemes that are certain to explode. This paper argues that if agents correctly believe in the possibility of a partial bailout when a gigantic Ponzi scheme collapses, and they recognize that a bailout is tantamount to a redistribution of wealth from non-participants to participants, it may be rational for agents to participate, even if they know that it is the last round. We model a political economy where an unscrupulous profit-maximizing promoter can design gigantic Ponzi schemes to cynically exploit this "too big to fail" doctrine." [more inside]
posted by Rafaelloello on Sep 23, 2008 - 57 comments

What market has grown from $900 billion in 2000 to more than $45.5 trillion and is completely unregulated? Welcome to the world of Credit Default Swaps. Speculative derivatives have been described as "financial weapons of mass destruction" by some guy named Warren Buffet. Some people wonder how you can have "$1 trillion in swaps bet on the success or failure of GM when the entire market cap of GM is a mere $15 billion." Credit Default Swaps are being triggered from Northern Rock in the UK to ANZ Bank down under as the "subprime" crisis unravels. AIG's CDS loss portfolio has already climbed to $5 billion from a previsouly estimated $1 billion. [more inside]
posted by ryoshu on Feb 18, 2008 - 87 comments

A primer on the global derivatives market, the City of London, and the credit crunch:

"In 2003 the total size of the world economy was $49,000,000,000,000. The total size of the derivatives being traded was $85,000,000,000,000. In other words, derivatives today are worth far, far more than the total economic activity of the planet. More than $1,000,000,000,000 of derivatives are bought and sold every day. Every single thing that can be traded through derivatives, is."

posted by anotherpanacea on Jan 2, 2008 - 30 comments