Woman who invented CDSs - Key architect of Cap and Trade

[FreakinDJ]

Now what could possibly go wrong

Woman who invented Credit Default Swaps is one of Key Architects of Carbon Derivatives

The banks are preparing to do with carbon what they’ve done before: design and market derivatives contracts that will help client companies hedge their price risk over the long term. They’re also ready to sell carbon-related financial products to outside investors.

Masters says banks must be allowed to lead the way if a mandatory carbon-trading system is going to help save the planet at the lowest possible cost. And derivatives related to carbon must be part of the mix, she says. Derivatives are securities whose value is derived from the value of an underlying commodity -- in this case, CO2 and other greenhouse gases...

Who is Blythe Masters?

She is the JP Morgan employee who invented credit default swaps, and is now heading JPM's carbon trading efforts. As Bloomberg notes

Masters, 40, oversees the New York bank’s environmental businesses as the firm’s global head of commodities...

As a young London banker in the early 1990s, Masters was part of JPMorgan’s team developing ideas for transferring risk to third parties. She went on to manage credit risk for JPMorgan’s investment bank.

http://www.washingtonsblog.com/2009/12/woman-who-invented-credit-default-swaps.html

I'm with Obama on this issue - We need to reduce Green House Gases but we need to do it in a way that does not stifle innovations of Green Technology while at the same time rewarding the heaviest Green House Gas Polluting Countries

[RB TexLa]

1. CDS work fine and help sell what otherwise could be unsellable debt

[deadmessengers]

10. Yeah, and you know why that debt was unsellable?

Because the debt is SHIT, lent to borrowers who were never in the financial shape they should have been to incur that kind of debt in the first place, and backed by assets not worth even close to what was lent to purchase them. That's why the debt was unsellable without the CDS chicanery.

[leftstreet]

2. Yeah, what could possibly go wrong?

[bananas]

3. Wrong - she's the architect of Derivatives, which are banned in the House bill

As the article you link to says: "The House cap-and-trade bill bans OTC derivatives".

[FreakinDJ]

4. see link

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7218718

[bananas]

7. That's for TAX FRAUD

A carbon tax won't solve that problem.

[RB TexLa]

5. But the house bill has no authority over a market it doesn't regulate or is outside

of the US jurisdiction. Derivatives are going to be a part of any cap and trade program and will be necessary for it's success.

[bananas]

9. No, derivatives do not have to be part of it and are not necessary for it's success

[bluestateguy]

6. Cap and Trade is asking for trouble

Impose the caps and then create tax incentives for companies that are able to do more than the law will require.

[benld74]

8. WHY can these people actually PRODUCE something people could actually use?

[rollingrock]

11. Cap and trade is a scam

Goldman Sachs and AIG are pouring millions in lobbying money to get a cap and trade system in place, which should raise a red flag. if you want to know where the next great stock market bubble/ponzi scheme will be, look to carbon credit trading. which wont do a thing for the environment but will make great profits for some wall street companies.

[cliffordu]

12. I'm sure this will ALL turn out just fine.

:sarcasm: