Remember the big hullabaloo about securities derivatives, such as interest rate swaps and credit default swaps? Along with their connection with subprime mortgages and collateralized debt obligations? With their role in the financial meltdown? And how they just had to overhauled and re-regulated?
You heard how these complicated, arcane deals undermined global finances? Because those “greedy” bankers, intent on “obscene” profit-making schemes used them to the detriment of us all?
Well, lengthy investigations were duly made, and our politicians in Washington have completed their pious, populist speeches. The media have duly contributed their remarks.
And then Congress made its conclusions.
The result? Perhaps some insights were finally gained on how derivatives really work and their purpose, after all.
The upshot of all the nattering? Draconian regulation was not necessary after all. The derivative markets continue to operate as they had before the ruckus started.
As you will gather from my previous reports, the financial meltdown had causes, that had little to do with derivatives as investment instruments.
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