In article ,
"John R. Carroll" wrote:

Joseph Gwinn wrote:
In article ,
"Bill McKee" wrote:

"Przemek Klosowski" wrote in message
...
On Mon, 19 Apr 2010 14:48:20 -0800, John R. Carroll wrote:

Trading derivatives on an open exchange would cause the market to
work appropriately.
You'd be able to see the Goldman divisions operating in real time.
Investors aren't stupid, they just can't see in the dark.
Transparency is the key. The CFMA of 2000 turned out the lights.

Agreed, even with transparency it may be hard to compete with them.
Do you know that major stock exchanges sell co-location space in
their computer enters, which gives big players who can afford it a,
say, 1ms latency to the transaction stream instead of 1 s that
everybody else sees? Remember the Russian guy who was arrested for
stealing computer code from Goldman Sachs

http://www.wired.com/threatlevel/2009/07/aleynikov/

He was doing this kind of thing. No wonder GS went ballistic, and
FBI obliged.

Warren Buffet has $63 Billion of CDO's. He is asking for the
existing contracts to still be traded off exchange. Well we are for
the law, just exempt us. Nice.

What Buffet is asking is that the rules not be changed retroactively,
on existing contracts. In other words, he is asking Congress not to
make ex post facto laws. If Congress refuses, there will be a
Supreme Court case asking that the constitutional prohibition against
ex post facto laws be enforced.

There won't be a court challenge.
There is no reason Congress can't now impose exchange trading conditions and
if Buffet is concerned, he can dump his position before the law takes
effect. " ex post facto" would only come into play if there was a
requirement now to disclose prior trading activity to the public beyond what
had been required. From what I've seen and read, there is no such condition
in the works and even the old law had settlement and disclosure deadlines
which were just ignored because the requirement was unenforceable. CFMA 2000
specifically prohibited requests for info and if you are denied knoweledge
of specific trades, you can't really claim a failure to disclose because
you'd be claiming a failure to disclose something that was specifically
beyond your ability to know about or inquire after.

Ex post facto (in other words) was one of Buffet's arguments. We shall see.

Joe Gwinn