What we don't know...

I'm getting tired of hearing the word "transparency." Everybody says they're for it, which of course is nonsense considering it was the lack of transparency in the financial markets that helped get us into this fine mess. Case in point: The New Yorker's Steve Coll reminds us that the value of all credit-default-swap contracts in the world are in the range of $55 trillion to $60 trillion. "So here is a global private market whose products, combined, have a nominal value roughly equal to the total size of the world economy’s output in a year, and apparently no one in any government knows the full market’s shape, distribution, or true vulnerabilities. Gulp," he writes. Here's more:

People don’t generally panic in the sunshine. They panic in the dark. And we are in the dark about what assets and liabilities are truly held in what has been properly labeled the “shadow banking system”--the global aggregation of hedge funds, privately placed debt securities, and the hedging or insurance contracts known as credit default swaps. By some accounts, the value of assets held in this shadow system is as large or larger than then value of the assets held in the formal, regulated banking system. But nobody really knows, as there is no transparent market for many of the securities of concern, and no systematic disclosure of assets and liabilities to government regulators--not here, not in Europe, and not in Asia, either.

Deregulation anybody?