Comments on: A Look At Wall Street's Shadow Market

60 Minutes: How Some Arcane Wall Street Financial Instruments Magnified Economic Crisis

[smith45415]

Why was there no mention of JP Morgan in the 60 minutes story? They are the largest holder of derivatives.
$80 Trillion or so in notional value according to the government agency that monitors banks

http://www.occ.treas.gov/deriv/deriv.htm

[smith45415]

Why was there no mention of JP Morgan in the 60 minutes story? They are the largest holder of derivatives.
$80 Trillion or so in notional value according to the government agency that monitors banks

http://www.occ.treas.gov/deriv/deriv.htm

[hozdaddy]

cbsisafraid.....google "this american life" it is an npr radio show. look in the archives for show #365. it will explain credit default swaps in laymen''s terms and you will then understand why $60 trillion is not a bogus number.

[jderenge]

As an ex-economist I understand the interplay of rate
of return, money supply, & credit. We are in deep do-do. With the expansion of 1 trillion dollars in our money supply, our money is devalued. And that amount
is only the beginning. What will happen when all the
credit default swaps come due? Two or more trillion?
As an old computer main-frame (super-large) computers
expert, I know that models only project what we want
to project and not what people think or feel. That''s
why models cannot predict the future; only predict
the past into the future which never happens.

[clasee]

60 Minutes provided a great public service by airing the Wall. St. segment on 10/5. Finally, clear and thorough explanations of the financial instruments (scams) that created this mess. Why couldn''t we have known before?
It''s all about greed, isn''t it? And, to Hell with the millions who are hurt by it.

[amolad7]

According to British author Benjamin Creme, we are now experiencing the death throes of an economic system that for decades has benefited relatively few rich and powerful
men at the expense of billions of the human family who do not even have the essentials
to stay alive. Creme, who for over 40 years has been associated with one of humanity''s Elder Brothers %u2014 a Master of Wisdom %u2014 predicts an intense period of %u2018attitude adjustment%u2019 for America, the epitome of selfcenteredness and excess in the modern world. Within a very short time, the head of this group %u2014 the World Teacher, Maitreya %u2014 will appear on national television and spell out, in no uncertain terms, the imperative
for humanity to see itself as one family and share the resources of the world, so the
needs of all may be met. And further, he will leave no doubt about the critical state
of our planetary home, the dangers of global warming, and the effects of
pollution on the health of humanity. Following a series of interviews in many countries, in which he will not reveal his true status, Maitreya will be invited by the world''s media to speak to all humanity via the linked satellites. On this Day of Declaration, he will be recognized as the Expected One of the world''s many religions and spiritual traditions.
Share International is a worldwide network of volunteers who present this information
for your consideration only.
Share-International.org
888-242-8272 (toll-free USA)

[amolad7]

According to British author Benjamin Creme, we are now experiencing the death throes of an economic system that for decades has benefited relatively few rich and powerful
men at the expense of billions of the human family who do not even have the essentials
to stay alive. Creme, who for over 40 years has been associated with one of humanity''s Elder Brothers %u2014 a Master of Wisdom %u2014 predicts an intense period of %u2018attitude adjustment%u2019 for America, the epitome of selfcenteredness and excess in the modern world. Within a very short time, the head of this group %u2014 the World Teacher, Maitreya %u2014 will appear on national television and spell out, in no uncertain terms, the imperative
for humanity to see itself as one family and share the resources of the world, so the
needs of all may be met. And further, he will leave no doubt about the critical state
of our planetary home, the dangers of global warming, and the effects of
pollution on the health of humanity. Following a series of interviews in many countries, in which he will not reveal his true status, Maitreya will be invited by the world''s media to speak to all humanity via the linked satellites. On this Day of Declaration, he will be recognized as the Expected One of the world''s many religions and spiritual traditions.
Share International is a worldwide network of volunteers who present this information
for your consideration only.
Share-International.org
888-242-8272 (toll-free USA)

[claydowner]

Thanks Steve Kroft you did a fine job on this report. I still barely understand what derivatives and "credit default swaps" really are. The moral of the story is we need huge regulatory reform for Wall Street. Transparency needs to be shown on these transactions that are nearly invisible to the public. Senate and House committees need to investigate what has happened. The GAO needs to audit what is going on in Wall Street with these complex money schemes.

Here are some common sense recommendations that need to be implemented by the Congress. There must be huge emphasis on regulatory reform on Wall Street with investment banks and the mortgage security industries. There must be fees applied to all Wall Street transactions paid into a government run insurance program. This would be similar to the FDIC. All Wall Street firms would be required to pay into this new insurance program. Also there must be an FBI, GAO, and Justice Department inquiry into all of these Wall Street firms that have benefited from the bailout. There needs to be a lot of these CEO''s in orange jumpsuits. They are crooks end of story.

[missingamerica]

"These complex financial instruments were actually designed by mathematicians and physicists, who used algorithms and computer models to reconstitute the unreliable loans in a way that was supposed to eliminate most of the risk."

They should have stuck to the traditional method of merely promising that they could turn lead into gold.

[hozdaddy]

cbsisafraid wrote.....Yes but there is only one asset worth $50,000! The liability isn''''t $500k but $50K. The layoff of the liability is not $500k. The biggest problem is just determining who would receive the $50k and the other 9 investors didn''''t spend $50k a piece for the liability.
Sorry your analogy doesn''''t work.

yes, there is only one asset worth $50k, but the problem lies in the fact that multiple swaps were sold against the single liability, thus losses are leveraged 10-20 times to the entity writing the swaps. the swaps weren''t limited to the buyer and seller of the particular mbs that was sold, any third party could buy a swap on a particular mbs without being an investor, hence the leveraged losses incurred by the party writing the swaps.

[tonyb-d-bing]

We got a bunch of crooks in the finance biz cheating the people. For all the damage they did to old, young, and other people, they should be put in jail for a very long time. And if they did these swindles intentionally, they should be executed.

[hpinson]

Another example of the "best government money can buy." If lobbyists were able to secure the word "swaps" instead of the real word "insurance" to avoid the need for adequate reserves, then let''s look at what officials got the lobbyist money and press charges. It''s also going to be interesting to see who makes the big money as a result of the $700 billion bill that was just past. It won''t be main street.

[neilrieck]

From the top of one of the documents, one page is titled "Archimedean copulas". Google this phrase then check out the wall street voodoo.

[ypadgett]

My friends and I often say that people would be SHOCKED to know what really goes on inside most companies to realize that it''s amazing they are even still in business with what goes on. What I dont think people realize is that these huge compensation packages are negotiated BEFORE the guys even start their first day of work. So they are not paid on what they DO, they are paid on their "reputation" and what "we want them to do" (and we know their reputations are not vetted because no one can ask those kinds of questions anymore....). So they are paid for "pie in the sky" dreams and hopes and that they''ll be "our guy" when we need him to be and a "team player" and so much hot air you cannot imagine it. Then when they screw up (as most do), they fire others, and then when they''ve run out of places to hide and other people to blame they walk off into the sunset with their huge compensations. Wake up America, our problems will NEVER go away until this kind of corporate blunders go away. In ALL CASES, corporate CEO''s pay should be tied directly to the salary of the lowest wage earner and nothing by 5 times more! That may mean some employees will make more than the top C level jobs (in sales positions, etc). FINE! They should. You do a job, but you are not ENTITLED TO STEAL FROM THESE COMPANIES!

[ypadgett]

One other thing of note, you mentioned that even a $45,000 a year trainee could see these problems a mile off. Of course the $45,000 trainee knows it too, but the problem is that he cannot say or do anything about it becuase if he does, he''ll loose his job. It''s easy to fire a trainee and no one will even bat an eye. ANYONE, and I do mean ANYONE in corp america these days (and I''ve worked there almost 20 years) who speaks up and says things are wrong, immoral and/or illegal is told (overtly and covertly) to SHUT THE HELL UP! I worked with data for years as a Data Analyst and if their numbers on their daily/weekly/monthly reports were wrong they didnt want to know.When I pointed out the errors they asked me to change the reports back! They didnt want it fixed because they they''d have to tell their boss of the error..etc, etc. They want only people who are drinking the cool-aid to work there - (they call them "A" players) and if you are not one, if you are trying to do your job the RIGHT way, you are a "troublemaker" (or the new term, "not a team player") and you are OUT (Enron is a perfect example). The hire-ups gamble that by the time they have run the company into the ground (and they couldnt be doing a better job if they were actually TRYING to do that), that they''ll be off to their next corporate adventure and no one will even know what wake of destruction they left behind at the old company (because you cannot ask those kinds of questions anymore when calling for references).

[ypadgett]

Very good program, very informative. WHY are we just hearing about these SWAPS now ??? The blame has been pointed at sub-prime and derivitives, but it sounds like you have found the peanut underneath the shell game. Keep it up, keep on them and MAKE THEM GO TO JAIL! For anyone who didnt realize the sub-prime mortgage mess was going to collapse (I dont even work in that industry and I knew it was a bubble that was going to burst) then you are lying and should be ashamed of yourself. We could all see this one coming a long way off (if you didnt, then you are not qualified to have your job!) On to my major point. What I was floored at was the ISDA''s CEO, Robert Pickel. He should be FIRED immediately (and I never call for that kind of thing lightly). He was a total deer in the headlights and he was lying thru his teeth! It was MORE than obvious. They all knew it was a house of cards and they are all liable - starting with this guy! Ignorance is no excuse, in fact, it''s absurd in this case because you really would have to be ignorant not to see this coming.

[deezawadka]

Excellent report. I just want to know why it wasn''t aired before those morons voted.

[deezawadka]

Excellent report. I just want to know why it wasn''t aired before those morons voted.

[herbgarden]

Thank you for Steve Kroft''s 60 Minutes excellent report on the Shadow Market. I am so sick of the cotton candy that passes for information on so much TV. As a very concerned citizen in a democracy, I want and need to know in understandable debth about the causes of this crisis, and in the same understandable detail, about what laws the congress and next president will enact to prevent future opportunities for deceptions i.e. Changing the accounting rule from mark to market,and leverageing beyond an institution''s capital reserves.

[puh-lease]

With all the finger-pointing at the gop, I just thought I''d add a tidbit of information that connects Obama''s people to this debacle.

Thanks, Inketolstoy,
Red Herring is aka a "smoke screen" or a "wild goose chase."