The proposal issued yesterday would pressure derivatives users such as banks and hedge funds to move away from opaque customized contracts by imposing higher capital and margin requirements on the instruments. Standardized derivatives would be moved to regulated exchanges or trading platforms and sent through official clearinghouses, according to the draft measure.
“The big broker dealers make a lot of money trading these customized derivatives,” said Paul Miller, a banking analyst for FBR Capital Markets in Arlington, Virginia.
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“Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected,” Obama said, referring to criticism of the governments growing role in the economy and markets.
Obama, in an interview with Bloomberg News on the eve of the release of his plan to revamp financial-market regulation, voiced confidence the economy would recover soon, while warning that robust growth was needed if the U.S. is to rein in its budget deficit without raising taxes on most Americans. - - - - >

“Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected,” Obama said in an interview with Bloomberg Television today at the White House. “All were doing is cleaning up after the mess that was made.”
The administration will unveil its proposal for revamping financial rules tomorrow, an effort likely to result in the most sweeping overhaul since the 1930s. Many of the changes will need to be approved by Congress, where jurisdictional and ideological clashes - - - - >

The amount of outstanding contracts linked to bonds, currencies, commodities, stocks and interest rates fell 13.4 percent to $592 trillion, the Basel, Switzerland-based bank said yesterday. Thats the first decline in 10 years of compiling the data. The amount of credit-default swaps protecting investors against losses on bonds and loans fell 27 percent to cover a notional $41.9 trillion of debt.
Investors shunned derivatives as demand for risky assets withered after the collapse of Lehman Brothers Holdings Inc. in September. The credit derivatives market also contracted as - - - - >

Berkshire Hathaway Inc. said Friday it recorded a loss of $990 per share in this years quarter, down from the $607 net income per Class A share reported in the same period a year ago. It was Berkshires first quarterly loss since 2001s third quarter when the company suffered large insurance losses as a result of the Sept. 11 terrorist attacks.
Analyst Justin Fuller, who writes about Berkshire online at http://www.buffettologist.com , said this was a tough quarter for Berkshire with the only bright spots coming in its utilities and insurance companies, which include Geico and General Reinsurance.
“Not surprisingly, every other - - - - >

By its own admission, Morgan Stanley is the preeminent adviser to companies, governments and investors. The New York- based firm has outperformed the Standard & Poors 500 Index and the financial industry this year with a 50 percent advance on its shares. Thats no comfort to the people who trade Morgan Stanley debt, which costs almost twice as much to insure against default as that of JPMorgan Chase & Co., the bank from which Morgan Stanley was created in 1935.
“It wouldnt surprise me in the least - - - - >