tag:blogger.com,1999:blog-5764290.post1636802642325355309..comments2024-03-22T08:01:16.236-04:00Comments on Rebecca Tushnet's 43(B)log: Hernando de Soto on property and the financial crisisUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5764290.post-22954867197635454072009-03-31T11:59:00.000-04:002009-03-31T11:59:00.000-04:00Professor Tushnet:Part of the issue with the recor...Professor Tushnet:<BR/><BR/>Part of the issue with the recordation of derivatives is that technology (e-mail, text message and so on) has made the formation of legally-binding contracts very cheap and easy. Efforts to promote better documenation on derivatives (advocated by both de Soto and Geithner) will provoke massive campaigns to capture, archive and comprehend electronic financial records. <A HREF="http://legal-beagle.typepad.com/wrights_legal_beagle/2009/03/record-keeping-in-financial-markets-to-soar.html" REL="nofollow">See Details</A> --BenBenjamin Wrighthttps://www.blogger.com/profile/11543639411820745571noreply@blogger.comtag:blogger.com,1999:blog-5764290.post-44915016148991760912009-03-27T08:08:00.000-04:002009-03-27T08:08:00.000-04:00I have to defer on the points you make; I simply d...I have to defer on the points you make; I simply don't know enough. It occurs to me that the real jump up in (face) value of the obligations came with the credit default swaps etc., which is like insurance, and I don't think insurance is subject to recording, which I take is your point about contracts. But perhaps other rules limit insurance (like my ability to bet on the continued life of someone with whom I have no relationship), or perhaps packing so much value into contracts is just new. Anyway, I thought this piece was an interesting extension of de Soto's work on getting record title to poor people as a way of encouraging development.RThttps://www.blogger.com/profile/00850241338827117087noreply@blogger.comtag:blogger.com,1999:blog-5764290.post-44306143685552333092009-03-27T00:36:00.000-04:002009-03-27T00:36:00.000-04:00This is a strange article.First, that the lack of ...This is a strange article.<BR/><BR/>First, that the lack of transparency in derivatives is immensely problematic because it makes it impossible to estimate counterparty and systemic risk is not exactly a shockingly new idea. You can find it even in financial journalism for the layman (it's discussed in When Genius Failed, for instance).<BR/><BR/>Second, I don't think that MBSes and CDOs *are* derivatives as classically defined. They're not contracts based on the value of an underlying asset; they're (fractional) ownership of (aggregated) assets. That's an odd error for a WSJ author to make, if I'm right. More importantly, just about any contract that doesn't involve real property isn't recorded centrally, either. I don't know what the magnitude of their value is by comparison but it's not negligible.Anonymousnoreply@blogger.com