A systemic analysis of the CDS crisis, solution proposal

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Wednesday September 24, 2008 · 11:23 AM PDT

2008/09/24 · 11:23

My understanding is that the entire network of mutual obligations represented by the advanced derivatives is a cancer that is superfluous to the functioning of the economic system, but can potentially infect and destroy it. Hence it needs to be isolated and removed. Pouring liquidity in without the firewalls will cause it to disappear in the bottomless securities pit.

This is my core proposal:

* Freeze the worldwide secondary wholesale instruments market (CDS, CDO and other advanced derivatives). Build a firewall between this part of financial institutions and the other parts (retail and primary instruments).

* Address the liquidity impacts on the retail and primary wholesale (stocks, bonds, options etc.) parts of the financial system through Government loans (in anticipation of a full buyout) against the securities portfolio.

* Unwind the advanced derivative positions (over months) on paper. Settle the positions against the loans (after the system stabilizes).

This is still a bailout, with some losses. But it adds firewalls that prevent securities from absorbing the liquidity being pumped in, prevents domino effects that may cause a meltdown, eliminates securities and avoids moral hazard.

swaminathan

Community (This content is not subject to review by Daily Kos staff prior to publication.)

Saturday September 13, 2008 · 4:55 AM PDT

2008/09/13 · 04:55

There has been a lot of meta back-and-forth recently about campaign comments. One source of frustration for many people is that good diaries about canvassing and useful information get buried by vent diaries and meta diaries. Many people also have all kinds of suggestions, for message frames, ads etc.

Is it possible to channel all this (positive and negative) energy in a way that creates useful feedback instead of clutter?

Can we use the community to organize the excellent material that get mentioned here into resource banks for canvassing?

This diary presents a possible solution: mothership diaries for evaluating and collating resources and for organizing comments and suggestions.

Poll

15 votes Show Results

How do you feel about the campaign?

15 votes Vote Now!

How do you feel about the campaign?

Great ads / speech / message recently! We want more!!

0 votes

You are doing great! Keep doing what you are doing!

1 vote

I trust that you know best.

2 votes

Need to attack more.

0 votes

Need to attack more forcefully.

2 votes

Need to go nuclear.

1 vote

Need to work the media more.

1 vote

Need to avoid the conservative media.

0 votes

Need to stop saying nice things about the opposition.

1 vote

Need to focus on Palin.

0 votes

Need to focus on McCain.

0 votes

Need to run more issue based ads.

2 votes

Need to run more attack ads.

0 votes

Need to just focus on the issues.

0 votes

I am really worried and depressed. We are going to lose!

5 votes

Platform Framing: Green Jobs. Wall Street for Main Street. Judgment & Integrity.

swaminathan

Community (This content is not subject to review by Daily Kos staff prior to publication.)

Saturday August 23, 2008 · 11:41 PM PDT

2008/08/23 · 23:41

Josh Marshall and others have pointed the need for a consistent message with unifying themes that can be conveyed in memorable soundbites. But can a 60-page platform be summarized in 10 words or less? Can we do some collective brainstorming to help in distilling the platform to a core message?

My attempt:

Green Jobs.
Wall Street for Main Street.
Judgment and Integrity.

These are words and frames that Obama is already using, that contrast strongly with current and McCain policy and positions, and articulate a different clear governing framework. Reasoning over the flip.

RSS

A systemic analysis of the CDS crisis, solution proposal

Organizing campaign feedback, resources: Mothership concept w/ poll

Platform Framing: Green Jobs. Wall Street for Main Street. Judgment & Integrity.