Credit Default Swaps - The games getting serious
The Commodity Futures Modernization Act of 2000 made Credit Default Swaps both legal, and illegal to regulate.
The bill was introduced in the House on Dec. 14, by Rep. Thomas W. Ewing (R-IL) and cosponsored by Rep. Thomas J. Bliley, Jr. (R-VA) Rep. Larry Combest (R-TX) Rep. John J. LaFalce (D-NY) Rep. Jim Leach (R-IA).. The companion bill was introduced in the Senate on Dec. 15th, 2000 (The last day before Christmas holiday) by Sen. Richard Lugar (R-IN) and cosponsored by Sen. Peter Fitzgerald (R-IL) Sen. Phil Gramm (R-TX) Sen. Chuck Hagel (R-NE) Sen. Thomas Harkin (D-IA) Sen. Tim Johnson (D-SD). [ 1 ]
Sentor Phil Gramm was a major architect of the bill which was 11,000 pages long and which was never debated in the House or the Senate.
President Clinton signed it into Public Law (106-554) on December 21, 2000
Isn't it interesting that such important and financial legislation is once again signed just before the Holiday without any congressional review? This is very similar to the legislation that created the Federal Reserve.
The CDS market grows rapidly. By the end of the year Cedit Default Swaps (CDSs) will back more than US $900 billion (thousand million).
JP Morgan Chase dominates the derivatives market with positions of US$24 trillion (million million).
JP Morgan Chase is the winner of three Risk magazine awards;
- Derivatives house of the year
- Interest rates derivatives house of the year
- Credit derivatives house of the year
[ 1 ] Commodity Futures Modernization Act of 2000 http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000