cdo's

" In the US, the Agriculture Committee has debated limiting the CDS market to a straightforward hedge, and eradicating the use of ‘naked swaps’ – the holding of CDS contracts by investors other than the holders of the cash bonds. Isda’s Bob Pickel explains that such a measure is simply too simplistic and could cause the demise of the credit derivatives market as we know it. We also look at the stand-off between CDS market regulators and dealers over the creation of a central counterparty clearing house..."
Finally some serious action in limiting the free for all casino that was going on for the past decade. It is an open secret that this kind of limiting has to be extended to the commodity markets as well so that only end users and producers can buy and sell. Secondly the total outstanding in the market at any point in time should not exceed the actual capacity that is available for extraction for that particular commodity. with a 100% cash margin or BG for all sale and buy deals this would guarantee that we dont see commodities as an investment - hence making sure that the best price is attained with actual demand against actual supply as against the artificial demand when liquity is good and artificial supply when the liquidity dries up.
coming back to the reported news item - would the exchange for counter party clearing be allowed to be set up? readers can form their own opinion keeping the track record of the regulators in managing the financial markets from S&L,barings, enron, et al till date..