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.
The absence of credit default swaps could push a country's borrowing costs even higher.
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.
The European Commission invited regulators, central banks, ratings agencies, fund managers and brokers for a technical meeting Friday in Brussels to discuss the fundamentals of the credit default swaps market.
Already, the political momentum to force meaningful changes has ebbed as banks returned to profits and bonuses last year, and broke free of government control, the NY Times reports.
Regulators are looking into whether investment banks deliberately sold risky derivatives, and then bet on the securities failing, the New York Times reports.
This former Wall Street insider is pushing hard to bring transparency to the derivatives market.
While at this time I don't expect a regulation bill to be ready for the President to sign this year, I believe it is likely there will be one ready before the mid-term 2010 elections next year. Again, change is coming whether it makes sense or not.
U.S. commercial banks earned $5.2 billion trading derivatives in the second quarter, as the level of risk eased in the global market for the complex financial instruments, according to a government report released Friday.
Among the many changes sparked by the Wall Street crisis, none seems more galvanizing that the call to regulate derivatives.
Berkshire Hathaway isn't happy with a Reuters story initially published with the headline, "Buffett's Berkshire: We Goofed On Derivative Risks." Berkshire CFO Marc Hamburg tells Warren Buffett Watch, "There is no indication whatsoever in my letter to the SEC that we made an error or that we underestimated the risks of falling stock prices."
Warren Buffett's Berkshire Hathaway reports $1.532 billion in derivatives gains during its second quarter, contributing to an overall net profit of $3.295 billion dollars for the quarter, or $2,123 per class A share. It's a return to profitability for Berkshire, after reporting a $1.5 billion net loss in this year's first quarter.
Stock market gains in April, May, and June, will energize second quarter net earnings from Warren Buffett's Berkshire Hathaway when the numbers are released after the stock market closes today. That will be a sharp contrast from recent quarters when market losses depressed Berkshire's net numbers and its stock price.
The financial reform should include some way of separating banks' proprietary trading from commercial banking, although a return to regulation similar to the Glass-Steagall Act would be impractical, legendary investor George Soros wrote in the Financial Times.
Warren Buffett confirms to CNBC's Becky Quick that Berkshire Hathaway has made changes to some of its controversial bets on the long-term health of stocks. Buffett told Becky last night by telephone that roughly $2 billion of put options on the benchmark S&P 500 stock index have been altered. Changes have also been made to a derivative on a foreign stock index, but he's not saying which one. The new contracts have a lower strike price but cover a shorter time period.
Warren Buffett tells our Becky Quick, with a chuckle, that maybe he has "lost his touch" as some critics have suggested, after a 30 percent decline in Berkshire Hathaway stock over the past 12 months. But, the way he sees it, Berkshire beat the stock market, as measured by the S&P 500 index, making it not such a bad year after all. Here's Becky's report from this morning's Squawk Box, including an extensive excerpt of her on-camera conversation with Buffett over the weekend.
Warren Buffett made news at this weekend's Berkshire Hathaway meeting by giving shareholders a preview of the company's first quarter earnings results. He also discussed expected losses in some of the credit default swaps the company has written. Berkshire has just filed a transcript of those comments with the SEC. Here's exactly what he said.
A record crowd of 35,000 Berkshire Hathaway shareholders hear Warren Buffett reveal that first quarter profits will be down almost 11 percent this year. But he remains very bullish on banks in Berkshire's portfolio, especially Wells Fargo.
Warren Buffett told shareholders the four candidates selected to possibly succeed him as Berkshire Hathaway's chief investment officer "did not cover themselves in glory."
Warren Buffett tells shareholders today that some of Berkshire Hathaway's derivatives contracts, those tied to the credit quality of junk bonds, will wind up losing money. He's still optimistic on those contracts tied to stock market indexes.