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Yrs_to_go - sorry I have not replied yet to your earlier post. My reply got very wordy, and I tried to find a way to cut it down, and then got off on other things, anyway....
I agree (from what I know) that an exchange trade would bring more transparency, I think that would a good thing.
And I only have a minute now, but I think the problems with the CDS's were that there was some of that implicit govt guarantee in there, which distorted the risk. So the companies traded them with a distorted view of the risk. That's what I'm getting from this.
True that companies will *ask* for special treatment that is advantageous to them. It is the govt responsibility to say NO when that is best. Just like kids ask for candy before dinner.
-ERD50
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