Securities Derivatives

  • A trader looks worried as he works in a dealing room in Tel Aviv, Israel.

    Stocks tumbled around the world Wednesday as investors were rattled by efforts in the US and Europe to tighten regulation of financial markets

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    Germany's ban on kinds of naked short selling will have no effect on investors' ability to bet on declining prices, analysts told CNBC.

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    David Sokol, a key Warren Buffet lieutenant, told CNBC that it would be a “disaster” if Congress enacted retroactive legislation that voided contracts dealing with derivatives.

  • LLoyd Blankfein testifying before House Financial Services Committee

    Goldman is in talks over a potential settlement with an investor that claims that it lost money and went out of business after buying into a $1 billion mortgage-backed security, the FT reports.

  • Warren Buffett

    For Warren Buffett, it's a matter of simple fairness: "If the restaurant only gets paid for an 8-ounce steak, they don't want to give you the 12-ounce one."   It's a concept at the core of his argument against allowing the government to require collateral on existing derivatives contracts.

  • Senator Benjamin Nelson (D-Nebraska) in a 2009 photo taken outside the U.S. Capitol

    Nebraska's Democratic Senator Ben Nelson is quoted by Bloomberg as saying he and his wife's long-held stake of up to $6 million in Berkshire Hathaway, does not create a conflict of interest for him on the financial regulatory bill currently at the center of a Capitol Hill fight.

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    The job of a market maker is to determine a price at which the trader is willing to buy a particular product AND a price at which that same trader will sell that same product at the same moment in time. Yes – a market maker will give you a price to buy, or sell – and they are generally indifferent to what you do, they just want you to do business.

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    When housing went from boom to bust, mortgages (especially subprime and Alt-A loans) were at the center of the economic crisis. And the term 'toxic asset' was born.

  • At least one company will benefit immediately from Washington’s reforms.

  • Warren Buffett

    Senate Democrats have killed a provision of their proposed derivatives bill that would have exempted existing contracts from collateral requirements.  Warren Buffett's Berkshire Hathaway has been lobbying in favor of the exemption.

  • Bank defaults have begun to slow and will probably peak toward the end of this year, FDIC chairman Sheila Bair told CNBC Friday.

  • Veteran financial analyst Dick Bove, with Rochdale Securities, sent out a research report Monday morning calling the SEC’s case against Goldman Sachs weak, but says the events of Friday could be setting the stage for another financial system collapse.

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    US financial companies still have more than a $1 trillion on their balance sheets, but analysts say they are unlike to stem the recent rally in financials.

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    Credit default swaps (CDS) will be looked at closely to ensure transparency but they aren't necessarily going to be banned, EU Financial markets commissioner Michel Barnier told CNBC.

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    While Alabama and Milan are rarely mentioned in the same breath, both locations now share something: they are making bankers nervous.

  • Luxembourgian Prime Minister Jean-Claude Juncker and German Chancellor Angela Merkel.

    Political leaders in Europe and, increasingly, the US are calling for more scrutiny of derivatives. The New York Times explains.

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    Greece is likely to formally ask the European Union for financial aid if the cost of borrowing does not fall in coming weeks and, if it doesn't get it, may go to the International Monetary Fund, Greek government officials told Dow Jones Newswires.

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    Greek leaders' overtures for far tougher curbs on credit default swaps fell largely on deaf ears in Washington, but they'll go back to Athens with some sage advice from local policy wonks: look in the mirror and don't blame market messengers for your debt woes.

  • Oil traders on the floor of the New York Mercantile Exchange, New York.

    The absence of credit default swaps could push a country's borrowing costs even higher.

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    As more details surface about how derivatives helped Greece mask their debt load, let’s not forget that the wonders of these complex products aren’t on display only overseas. Across the USA, municipalities, school districts, sewer systems and other tax-exempt debt issuers are ensnared in the derivatives mess. The New York Times explains.