> RoMunn wrote: > I don't know that I would say we need more regulation, but we definitely > need different regulation. Your example of AIG selling, in effect, insurance > disguised as credit default swaps is a perfect example.
Geeky point, but credit default swaps ARE insurance, just unregulated insurance which is why they're called "swaps" and not "insurance". If AIG (or anyone else) called swaps "insurance", that would've triggered the regulation. And, of course, since it's not "insurance" you don't need a capital reserve and, etc, etc, that goes with "insurance" Point is, AIG wasn't using a "trick" to get around anything. The law literally saws that anyone can sell anything - no regulations. You have Phil Gramm to thank for that. He wrote the law that said that AIG, an insurance company, could also be a hedge fund that traded in unregulated products. When the hedge fund went BOOM it did it so spectacularly that it would've wiped out all of AIG which would've wiped out zillions of people's whole life policies which would've caused systemic failure. So the only question with the unregulated shadow financial services was who was going to destroy the World economy first. It's a tough call, but my guess is they all would've tumbled at once with AIG as the trigger. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:295588 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
