Denninger :Has President Obama issued an actual directive to Geithner?

"May 13 (Bloomberg) -- The U.S. Treasury will tell banks to increase transparency in the over-the-counter derivatives market by making prices available on centralized computer platforms, accordin"g to people familiar with the plan.

Treasury Secretary Timothy Geithner may announce the decision as soon as today, said the people, who declined to be identified because they weren’t authorized to speak publicly. Geithner laid out a framework in March for increasing regulation of financial markets as the worst credit crisis since the Great Depression caused more than $1.4 trillion in writedowns by banks and financial companies worldwide.

That would be a dramatic change from Geithner's and Treasury's position (going back to Paulson)

- in fact, its an outright flip-flop.

Geithner has opposed this of course because it is not in the best interest of Goldman (and other sell-siders in the business) as price transparency means spreads contract dramatically and thus the skimming (and outright ripping off) that has gone on for the previous 10 years in this market will largely disappear."

Link: ( and always worth a read)
http://market-ticker.denninger.net/archives/P3.html

The various "moratoriums" have been claimed to be responsible. Balderdash. What is responsible for this is intentional sandbagging by the banks who have two separate but interlocked perverse incentives to do this:

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They are praying that home values recover, so they do not have to take such a big loss (what's actually happening is the prices are continuing to go down, making the loss worse!) and
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They are holding these notes at full face value on their books; if they foreclose and sell the property they are forced to mark the note to the market based on recovery value as recognized in a sale. If they do that many of these banks would be instantaneously recognized as insolvent.