Professor Elam

One observers says that the swaps and derivative industry is out of the Panic Zone. Well that reassures me, you to eh?  The writer suggests that the derivatives industry needs a clearinghouse to determine value. Gee wouldn’t that be called an Exchange?  An open transparent market would allow everyone to  see price and volume?  Gee works round the world, sounds good to me.  Ever since banks and brokerages started going off market to create trillions of dollars of derivatives we have been on borrowed time. Long Term Capital Managemet and Bear Stearns are the first two examples.  No one knows how many more are out there. We seem to be finding out at the wrong time.