Comment Text:
Dear All.
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 bailouts.
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.
Please see the attachment "Market risk Advisory Committee AND 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".
Best regards,
Bill Harrington
Senior Fellow
Croatan Institute
