The Depositary Trust and Clearing Corporation ("DTCC"), an industry-owned and -operated creature, is scheduled to publish weekly values for Credit-Default Swaps. The DTCC will publish "on its website www.dtcc.com/derivserv the outstanding gross and net notional values ('stock values') of credit default swap (CDS) contracts registered in [its Trade Information] Warehouse for the top 1,000 ... entities and all indices, as well as certain aggregates of this data," according to this October 31, 2008 DTCC Press Release, "DTCC to Provide CDS Data From Trade Information Warehouse".
The first values were published by DTCC on Election Day, 2008: At that time, the DTCC reported a total value in Credit-Default Swaps of $33.6 Trillion or $33,600,000,000.00 "on corporate, government and asset-backed securities. That is less than some earlier estimates of $50 trillion or more." Deal Book, "D.T.C.C. Puts Market for Credit Swaps at $33.6 Trillion" Andrew Ross Sorkin, Ed., New York Times Business Section Online, Tuesday, November 4, 2008.
DTCC's controlling board includes JP Morgan Chase, and Goldman Sachs, which for more than three decades was the source of Millions of Dollars paid to the current Secretary of the Treasury. The Treasury Department is caught up in currrent efforts to put values on Credit-Default Swaps. Treasury will undoubtedly turn to DTCC for information concerning those values, if any.
Credit-Default Swaps are an unregulated form of Credit Insurance, as has been posted many times in this space.
It remains to be seen whether the information forthcoming from the Depositary Trust and Clearing Corporation will be informative to those who do not already understand Credt-Default Swaps (if in fact anyone besides their makers actually understands how they work, you should pardon the expression).
Postscript on the Evening of Thursday, November 6, 2008:
"TBD" may have been determined today. It is reported that the DTCC data simply do not include information on the "privately negotiated credit-default swaps that insurers such as AIG, MBIA Inc. and Ambac Financial Group Inc. sold to guarantee securities known as collateralized debt obligations." Shannon D. Harrington and Abigail Moses, "Credit Swap Dsclosure Obscures True Financial Risk (Update 3)" (Bloomberg.com, Thursday, November 6, 2008).
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