VIDEO:
Prosectute Fraud to Regulate Credit Derivatives Derivative
Debate: FinancIal Nymphomania, Kama Sutra? CNBC – July
10, 2009
Melissa Francis, Larry Kudlow and guests Joel
Telpner (Mayer Brown) and Janet Tavakoli
Janet
Tavakoli,
president of Tavakoli Structured Finance, said credit derivatives
were massively involved in “transactions
that did more than just French kiss fraud.” The deals made
the writers of the Kama Sutra look as if they lacked imagination. Dear Mr. Buffett describes phony deal after phony deal, many
of which were enabled by credit derivatives. The regulators such
as the SEC are staffed with lawyers ill-equipped to understand
the custom transactions (see notes below).
She maintains we should prosecute fraud to regulate credit derivatives.
Wall Street owes America. To regulate credit derivatives, prosecute
the fraud in the past few years that contributed to the global
financial meltdown. This will reduce moral hazard and send a
long overdue message to this market.
JT Note: I am for both exchange traded and custom credit derivatives
(and wrote professional books about these products). But in my
opinion, the new proposals do not address the major abuses in
this market. Janet
Tavakoli is the president of Tavakoli
Structured Finance, a Chicago-based firm that provides consulting
to financial
institutions
and institutional investors. Ms. Tavakoli has more than
20 years of experience in senior investment banking positions,
trading,
structuring and marketing structured financial products.
She is a former adjunct professor of derivatives at the University
of Chicago's Graduate School of Business. She is the author
of:
Credit
Derivatives & Synthetic Structures (John
Wiley & Sons,
1998, 2001), Structured
Finance & Collateralized Debt
Obligations (John Wiley & Sons,
2008), and Dear
Mr. Buffett: What An Investor Learns 1,269 Miles From Wall
Street (John Wiley & Sons
January 2009) Clients
of Tavakoli Structured Finance
have the benefit of proprietary consultation, which is
not available in any other paid or public forum. Clients
also commission proprietary research and analysis. TSF
makes some information available to the general public.Please
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