Comment Text:
Today’s joint submission irrefutably demonstrates that the flip-clause-swap-contract is, by design, grossly under-capitalized and intrinsically destructive. The contract undermines social compacts around the world by directing investment to sub-optimal uses, by eroding value of ABS and other structured debt, by incentivizing swap dealers to self-sabotage by under-resourcing themselves, and by generating public bail-outs.
Today’s joint submission also irrefutably demonstrates that nearly all financial regulators, credit rating staff, and complex-finance practitioners worldwide have knowingly and intentionally undermined social compacts for decades by mutely going with the flip-clause flow rather than speaking out and applying what they know.
Four documents comprise today’s submission. The first is attached here.
(1) SEC Petition File Nos 4-790 & 4-799 AND CFTC §13.1 Petition to Ban Flip Clause and UK Capital Comparability Proposal AND Moody's Rating of SF CDOs
(2) Moody's Ratings Methodology "Moody’s Approach to Rating SF CDOs", 4 March 2024
(3) “WJH—CV—Q1 2024”
and
(4) Moody's Pre-Sale Report "Elstree Funding No.3 PLC", 9 March 2023.
Please make today’s joint submission—all four documents—publicly available on the respective sites for the seven title-line matters.
