The week Wall Street capitulated
"Enough! Just sell my stock, sell me anything with credit risk and buy T-bills – at least I know I’ll get my money back"
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| Thursday October 9: Christopher Cox, chair of the SEC: urged Congress and Treasury to regulate the credit derivative market |
As the bandwagon to clampdown on credit derivatives gathers pace, Christopher Cox, chair of the SEC, says that Congress should act to allow the regulation of the credit default swap market. Meanwhile Paul Krugman – soon to be a Nobel laureate – calls on the Treasury to use the powers that they did not ask for but which Congress gave it anyway and recapitalize the banking system... At the end of a momentous and at times frightening week, Euromoney talked to a credit trading head at a US bank. "Throughout this crisis I’ve avoided use of the word capitulation," he said. "I think it’s used too often and wrongly to describe what is just a market correction. But today it feels like capitulation. It’s as if every single market just said: ‘Enough! Just sell my stock, sell me anything with credit risk and buy T-bills – at least I know I’ll get my money back’."