In the House Financial Services Committee hearing Monday on Bernard Madoff’s $50 billion alleged Ponzi scheme, some good points were raised by Congress members of both parties. One was particularly relevant:

Representative Stephen F. Lynch, Democrat of Massachusetts, said short-sellers seemed to know about the Madoff fraud and the S.E.C. should have seen it coming. “The short-sellers knew it was coming and they invested in it — how did they know and the S.E.C didn’t,” Mr. Lynch asserted. “These short-sellers were able…

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It’s been called a ticking time bomb by Investor’s Business Daily. CNNMoney asks if this will be the next disaster. Yet the Feds are delaying one key in bringing stability to our financial markets.

As a $62 trillion dollar over the counter market, CDSs need an exchange or central clearinghouse to provide transparency and collateral requirements. CME (formed from the Chicago Board of Trade and the Chicago Mercantile Exchange) and the Clearing Corp (formed from 17 financial players including UBS and Goldman…

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At the peak of the real estate boom, there was one group of individuals who said the bubble was about to pop. They pointed to overvalued land and bad underwriting of loans. And they bet their own money on their beliefs. Who are these unsung prophets of the subprime bust: the much-maligned short-sellers, whom both Britain, as Iain Murray reported yesterday, and now the U.S. Securities and Exchange Commission temporarily want to ban in an effort to keep the share price…

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