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Justice Department Loves A Good CDS Conspiracy Theory

The never-ending story known as the persecution of the CDS market has taken a truly incredible turn. After a lifetime's worth of bitching and moaning from Washington about the opacity of the market, the Justice Department has decided to take aim at one of the few sources of CDS pricing data, Markit, for its diabolical role in the credit crisis. The conspiracy theory contends that Markit's major shareholders (JPM, BAC, RBS, and GS) may have benefited from unfair access to price information through the portal. Of all the things to focus the witch hunt on, trying to determine whether or not single name traders at some of the largest players in the CDS market squeezed an extra half bp out of a counterparty who used only Markit quotes for their credit derivatives business is an interesting choice.
Credit Swaps Investigated by U.S. Justice Department [Bloomberg]