Alea

Almost 25 years ago (man time files), I was working at a large NYC bank that wanted to start trading in OTC currency options. We had to convince NY State regulators that such options were neither insurance poliices nor a form of gambling. Convincing the regulators proved more diffiuclut than our lawyers had anticipated. We won the day on the insurance argument by pointing out that we could ‘delta hedge’ (try explaining that to an insurance regulator) the options. We won the day on the gambling argument by pointing out that we didn’t have a fixed payout (we crossed our fingers that no one would ask about an option spread).

What is the French say, “La plus la change, la plus de meme chose” or something.

I believe the New York Department of Insurance can reconsider opinions, clarify and issue new regulations. So, while the question was resolved for the moment it was not settled as a matter of law as that requires either clear legislation (although no matter how “clear” it is still subject to judicial review) or a judicial determination; both are preferable.
As for other nations, their laws and opinions are not binding on the US unless someone comes up with a treaty obligation.

Under traditional definitions CDS is insurance and the worst sort w/o reserves as learned in 1905 reserves are all. But Greenspan’s horn blew and states went quiet. If it is a bet it is worse as gambling is illegal in all states unless a license is issued.

my friend, dd, if you worked in ANY investment “bank”, in post 2000, you KNOW CDS is a BET.
I-Banks even could take out CDS on themselves!!!!!! IT HAPPENED.

Many thx, will read it soon, busy at the moment.

Thanks! I’ll be adding some more material very soon.