I've been working on some common sense joe six pack reforms. Try these on for size:
1. If a company is too big to fail, it is too big to exist and should be broken up. Use national
security as a pretext if you have to. No more bailouts needed.
2. If an investment instrument can not be explained in language a sixth-grader can understand in one sentence, it should not be allowed. That way, maybe, our politicians can understand what they are supposed to oversee.
3. Here's a novel thought. The sum total of insurance on a bond should not surpass the face value of the bond. At present, there are incredible multiples of the bonds involved in the credit swaps. Only those who present the bonds should be able to collect.
4. You've heard of "insurable interest," right. In order to short a stock, you must own the stock. In order to insure a bond, you must own the bond.
5. Insurance, by another other name- call it credit swap or not- should be subject to insurance regulations.
Just another two cents offered facetiously, maybe.