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Comment for Orders and Other Announcements 89 FR 8026

  • From: Bill Harrington
    Organization(s):
    Croatan Institute

    Comment No: 73388
    Date: 3/24/2024

    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 third 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.