At T&T Capital Management we are firm believers that all credit default swaps should be on regulated exchanges. The value of these products is far less than the overall risk that they present to the global economy and financial markets in general. Even worse the lack of transparency is pervasive and while they are an important source of profits for many financial companies, one need only look at the discounts to book value that the financials are trading at to see the lack of confidence the market has in assigning value to these businesses, and the big problem is transparency and understanding. While the CDS market can be an important hedging tool there is no excuse for not having better transparency and regulation.
INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.