Op-ed from Barbara Roper, Consumer Federation of America, talking about how the CFTC’s final rules for swap dealer business conduct were softened to benefit swap dealers.  Cardea Partners are independent representatives for anyone, public or private, entering into swaps and options contracts.  And yes, even though such a representative is not mandated for trades with certain parties under certain conditions, the benefit of understanding what you are getting and the quantifiable savings realized with a swap advisor make having one the right choice. (Huffpost)

Interesting article from Bloomberg about the history and plight of LIBOR and the complaints that market participants have levied against the indices that set values for some $360 trillion face of financial assets around the world.  Primary concern to me is the fact that perceived credit quality is tied to each bank’s offered rate.  Should bank rate submissions be anonymous to the marketplace?

An example of why we and other swap advisors are available in the marketplace to help clients manage interest rate exposures in a cost-effective manner. (NY Times)

Lackluster volume from banks to lend to each other has significatly reduced the demand for LIBOR which is the interbank lending rate. Less risky to use depositers money rather than borrow from other banks at the LIBOR rate. The question is what would be the alternative index. (WSJ)

An article in The Economist “Fat-tail attraction”, discusses hedging for worst case scenarios. Borrowers who are floating at historically low interest rates may want to consider buying disaster insurance in the form of an interest rate cap against the borrowing index. Interest rate caps can be used to hedge LIBOR, PRIME or SIFMA.