Two announcements we should be looking for:
1. 3Q
2. "The anticipated announcement."
Does anyone have any speculation as to when the 3Q results will be announced and what may be in the document?
Oh, and as a side note, the credit swap market is now estimated to be at $32 trillion USD, down from $55 trillion from the election.
WSJ, November 15, 2008, B6:
"Regulatory Troika Heads Off Swap Turf War"
To Aid of CDS Clearinghouse(s) by Year's End, the Fed, SEC and CFTC agree to Cooperate.
By Doug Cameron and Jacob Bunge
Three U.S. regulators sought Friday to head off a brewing turf war centered on the credit default swap market, though doubts remain about whether industry solutions to clear trades centrally will be up and running by years’ end.
The Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission are reviewing rival applications to establish a clearing house for credit-default swaps. The three regulatory agencies understanding to cooperate and have one or more credit default swap clearing platforms operations before year's end.
More than $32 trillion of these insurance like contracts are outstanding in this over the counter derivatives market is viewed by lawmakers as a potential source of systemic financial risk.
At a futures industry conference in Chicago in the past week, executives from across the sector suggested that industry efforts to establish a credit default swaps clearinghouse were more complex than first thought and might take longer than expected.
But exchange operators IntercontinentalExchange Inc. and CME Group Inc., which are working on clearinghouses, say their platforms will be ready in time.
The New York Fed has taken the lead in trying to improve transparency and processing of credit default swap trades. The CFTC and the SEC have also laid claim to overseeing the market.
The memo of understanding reiterated efforts to improve oversight and transparency but stopped short of giving any single agency control. State-chartered banks that are members of the Federal Reserve, derivatives clearing organizations or a clearing agency were identified as potential vehicles for the clearing houses, mirroring industry efforts to meet the Fed driven goal.
Atlanta based ICE effectively has the support of the largest swap dealers for its planned clearinghouse, which is expected to be in the form of a bank that is regulated by the Fed. The platform is aiming to start clearing trades next month.
CME Group has applied to the CFTC to establish a credit default swap clearing and trading platform in partnership with Citadel Investment Group. New York Stock Exchange parent NYSE Euronext, meanwhile, is seeking an exemption from the SEC to provide CDS clearing solution in the U.S. by January and will launch a European version next month.
While ICE is keeping CDS clearing separate from its existing futures products, CME plans to incorporate the swaps into its existing clearinghouse. The "co-mingling" approach has drawn fire from existing CME customers, despite the company's insistence that safeguards will be in place to separate the products and their risk.
Walter Lukken, acting chairman of the CFTC, said this past week that he expects one or two CDS clearing services will be approved "in weeks." He said the agencies would work to synchronize their approvals so that none of the rival proposals receives an unfair advantage.
