George Soros calls CDS "instruments of destruction"

That's a headline today on Bloomberg video. It's amazing that there is even a debate about this. Credit default swaps created a downward spiral in the market for the benefit of closeted traders to the tune of billions which had nothing to do with the overall economy. That Aunt Mamie refinanced her house to pay off credit card bills and buy a Cadillac, that Golden State invented the most risky mortgages and then sold the book off to Wachovia's mindless Ken Thompson at a premium, that WAMU's strategy of a bait and hook mortgage book plus de novo expansion never made any sense at all, that Lehman and Bear both lived off of the CMO market, all, yes all, of that pales in comparison to the damage done by this derivative, the CDS's. Now it's as if we're on CNN where no matter how ludicrous the issue they feel compelled to have two panelists who support it and two who are opposed. Balanced idiocy, which is the case here now. The CDS market has a purpose as a hedge for held debt, but even now it is being used to gang up on soveriegn debt as a naked bet. It seems fishy that in an issue so obvious that big political contributors like SAC who live off of these regulatory anomalies somehow prevent any serious examination of the issue. George Soros is no wallflower, and he is no saint. That he would step out, as he did a few months ago as well, and condemn this market says more than we need to know about the evolution of this market in the hands of an incestuous cadre of traders and Steve Cohen --- this is not a very attractive group of people. That they pay millions for art is no redemption.