Economics of Contempt labels me an “idiot journalist” for saying that the SEC is charged with regulating securities but not derivatives. As he points out, the SEC does too regulate securities — specifically, it regulates options on stocks, which are certainly derivatives, as well as exchange-traded options on foreign currency.
My bad. When I think derivatives, I think of swaps and futures in Chicago, rather than exchange-traded stock options — basically, I think of the kind of things which are either regulated by the CFTC, or not regulated at all (like CDS). But yes, there are some derivatives which are regulated by the SEC. My feeling is that all derivatives should be regulated, and that none of them should be regulated by the SEC, which should stick to securities. But of course I shouldn’t get ahead of myself, and for the foreseeable future it is indeed the SEC, and not the CFTC or anybody else, which is in charge of regulating a large chunk of the options market."
At least he called you a journalist. Come to think of it, it does seem better to be called an “idiot x”, than just “an idiot”, which I normally get called.
Also, you’re on his blogroll. That counts for something.
“Flattered? Yes, obvs. But OMGWTF?”
By the way, I eat sardines every day, because my health guru, Andrew Weil, has been recommending them for years. I also managed to order some Chocolate Olivers, no thanks to you, mate.
Just for fun, say something asinine about Adam Smith, so we can find out if Gavin Kennedy reads this blog.- Posted by Don the libertarian Democrat
And The Economics Of Contempt:
"Yes, the SEC Regulates Derivatives
The SEC does, in fact, have the authority to regulate derivatives. It regulates options (e.g., calls, puts, straddles) on individual securities, options on certain indexes of securities, such as the S&P 100, and exchange-traded options on foreign currency. Options are unquestionably derivatives.
What Salmon and Klein probably meant was that the SEC doesn't have the authority to regulate swaps. But swaps aren't the only kinds of derivatives by any means. Confusing swaps and derivatives is what leads idiot journalists to constantly mislabel derivatives as "unregulated financial instruments." (If journalists think derivatives are all unregulated, then I'm curious what they think the Commodity Futures Trading Commission does?)