Quelle Surprise !!: Our corporately-sponsored Senate rejects ban of naked credit default swaps

[marmar]

May 18, 2010, 9:18 p.m. EDT · Recommend (3) · Post:

Senate rejects ban of naked credit default swaps
A measure to create a tough so-called Volcker rule is also blocked for now

By Ronald D. Orol, MarketWatch


WASHINGTON (MarketWatch) -- Senators late Tuesday rejected an amendment to a sweeping bank reform bill that would have prohibited so-called naked credit default swaps.

Credit default swaps are a form of insurance institutions buy on bonds they purchase to protect them against the possibility that those bonds default.

However, naked credit default swaps are derivative investments set up by two investor groups that have no insurable interest but are betting on whether another bond will default or not.

The measure, which was introduced by Sen. Byron Dorgan, D-N.D., would have been attached to a bank reform bill under consideration in the Senate. A measure banning naked credit default swaps was approved by the House as part of a bank reform bill it approved in December.

"There is not one social or economic benefit to these investments," Dorgan said. .............(more)

The complete piece is at: http://www.marketwatch.com/story/senate-rejects-ban-of-naked-credit-default-swaps-2010-05-18-211800?dist=beforebell

[Javaman]

1. meh, nothing surprises me anymore...

they are just further propagating our fiat economy. It's they only way it continues to exist.

getting rid of naked trading is like looking behind the curtain at the "great oz".