Sunday, December 6th, 2009

As part of the bailout should credit default swaps and other derivatives be outlawed?

Credit Derivatives
Jbushkey asked:


how about “pick a payment” mortgages? 0 down mortgages? We might as well start with the much needed re regulation of the banksters. What are the most important regulations the govt could create?

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3 Responses to “As part of the bailout should credit default swaps and other derivatives be outlawed?”

Holy Cow Says:
December 8th, 2009 at 2:22 am

Regulations need to be restored.

judo702 Says:
December 9th, 2009 at 1:14 am

If it stayed with the banks and not be sold to the brokers this would have not happened. The lenders did care if the people qualified or not because they just sold it off as soon as they could. The banks need to take responsibility for their actions and pay up.

david v Says:
December 12th, 2009 at 9:05 am

The problem isnt a lack of regulation. You have government sponosored agencies buying loans that no one that was going to get stuck with them would have made. They were buying these loans for several reasons. 1) to get their bonuses to kick in for doing x amount of sales. 2) to comply with legislation making it easier for people to buy homes.
As the interests rates fell and the real estate market boomed it was easier and easier to get people into homes especially if these govt. sponsored banks were going to buy these loans from you meaning no risk for the banks or lenders.
So rather then think about more regulation you should be asking why was the govt. sponsoring freddie and fannie making this possible? Where was the supervision of them? There is plenty of blame here for all except the free market. This is a result of once again government influence corrupting the free market.

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