Syllabus:

Futures Options and Derivatives

                                                                                                                                                                             Spring 2018 Syllabus 

Michael Greenberger, J.D.

Law School Professor

Email: mgreenberger@law.umaryland.edu

 

Jeanne Stringer (Professor Greenberger’s Coordinator)

Phone: 410-706-0585

Email: jstringer@law.umaryland.edu

Contact Jeanne to make appointments to meet with Professor Greenberger. 

 

Kyle Cleavenger 

Research Assistant 

Email: kyle.cleavenger@umaryland.edu

New issues regarding derivatives and the state of global financial markets are constantly arising, so we will doubtlessly supplement/replace/move items on the syllabus that will be provided at the first class. We will use Blackboard to notify students of any changes to the syllabus and to inform students about how to acquire newly assigned materials. Please check Blackboard regularly. Also, students should email Professor Greenberger if they find independent material or information that they believe is relevant to the course and would benefit the class.

 

There is no casebook for this course. Students will need access to the following book for the first class.  It can be obtained quite inexpensively as used copies online. 

 

Michael Lewis, The Big Short: Inside the Doomsday Machine (2010).

 

Most readings and other materials on the final syllabus will be available through hyperlinks in that syllabus. Readings/materials not available through hyperlink will be identified as being available on Blackboard. These materials will be located in the “Course Materials” folder within a sub-folder for that week’s class session. Students who encounter trouble accessing assigned materials should immediately email Professor Greenberger.

Class 1: 

 

Topics: 

    1. Examine roadmap of the course. 

    2. Discuss The Big Short. 

 

Assignments: 

  1. Lewis, The Big Short: Important Note: Please read The Big Short in its entirety in preparation for Class 1 (approximately 260 pages). Also, please read the book even if you have already watched the The Big Short movie, as the book contains a lot of relevant content not addressed in the film adaptation.

 

Class 2: 

 

Topics: 

    1. Discuss American Casino. AMERICAN CASINO (Table Rock Films 2009).

    2. Discuss CDO and CDS flow charts. 

 

 Assignments: 

 

    1. DOJ/Grand Jury Charges

    2. US Banks Suffer 20% Jump in Credit Card Losses

    3. Goldman Sachs Loses Its Trading Edge 

    4. Blockchain Eyed for Mortgage Bundling That Caused 2008 Crisis 

 

Class 3:  

 

Topic: 

    1. An Introduction to Commodity Futures and Options 

 

Readings: 

 

    1. Nick Battley, An Introduction to Commodity Futures and Options.

Nick Battley, An Introduction to Commodity Futures and Options (1989).

  • Read pages 1-4, 7-18, 39-45, and 99-102

    2. Satyajit Das, Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (3rd ed. 2012).

  • Prologue (read pages 1-22) and Epilogue (pp 350-373) 

 

Class 4: 

Assignment: 

  • View Inside Job (2010) (“the definitive film about the economic crisis of 2008 and the role of Wall Street in modern society”). INSIDE JOB (Sony Pictures Classics 2010).

Class 5:  

 

Topic: 

    1. CDO, CDS, and Naked CDS Speculation

Reading: 

     1. Michael Greenberger, Closing Wall Street’s Commodity and Swaps Betting Parlors: Legal Remedies to Combat Needlessly Gambling up the Price of Crude Oil Beyond What Market Fundamentals Dictate, George Washington University Law Review (April 2013).

Available on Blackboard. 

Class 6:

Topic: 

    1. History of Futures and Swaps Market 

    2. Deregulation of Swaps Market

 

Reading: 

    1. Michael Greenberger, Too Big to Fail Banks Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market. Michael Greenberger, Too Big to Fail Banks Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market, The Institute for New Economic Thinking (Jun. 19, 2018), https://www.ineteconomics.org/uploads/papers/WP_74.pdf.

Available on Blackboard. 

  • Read pages 1-43

 

 

Class 7: 

Topics: 

    1. More on 2008 Economic Meltdown 

    2. View and discuss The Warning from Frontline (Oct. 20, 2009) on PBS (chronicling the struggle during the late 1990s over whether to regulate financial derivatives). This went on to win a Peabody Award. https://www.pbs.org/wgbh/pages/frontline/warning/

 

Videos: 

    1. Michael Greenberger, Interview with Ira Glass on This American Life, available at http://www.thisamericanlife.org/radio-archives/episode/365/another-frightening-show-about-the-economy   (Click on “play” arrow, then skip ahead to 39:55 minutes into the broadcast). 

    2.“The Diane Rehm Show,” NPR – Dec. 14, 2009, Professor Greenberger discusses financial regulatory legislation passed by the U.S. House. 

    3.“The Diane Rehm Show,” NPR – April 26, 2010, Professor Greenberger is part of a live discussion on the latest financial regulatory reform efforts on Capitol Hill.

    4.“The Diane Rehm Show,” NPR - June 28, 2010, Professor Greenberger gives a detailed overview of the financial regulatory reform package.

 

- Michael Greenberger, Too Big to Fail Banks Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market. Michael Greenberger, Too Big to Fail Banks Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market, The Institute for New Economic Thinking (Jun. 19, 2018), https://www.ineteconomics.org/uploads/papers/WP_74.pdf.

  • Read pages 44-62

 

Topics: 

 

    1. Dodd Frank’s solutions for Stabilizing Swap’s Markets;

    2. Extraterritorial Effect of Dodd Frank; 

    3. Deguarantee Loophole

Class 8: 

 

Topics: 

 

    1. Deguarantee Loophole as an “Evasion of Dodd-Frank”

    2. Substituted Compliance 

    3. International Comity 

    4. Substituted Compliance Fails in Real World

    5. Possible Strategy to Enforce Extraterritoriality of Dodd-Frank

 

Reading:

 

    1. Michael Greenberger, Too Big to Fail Banks Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market. Michael Greenberger, Too Big to Fail Banks Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market, The Institute for New Economic Thinking (Jun. 19, 2018), https://www.ineteconomics.org/uploads/papers/WP_74.pdf.

  • Read pages 63-End

Class 9: 

Topics:

    1. Options Seminar: Long vs Short and Call vs Put

 

Reading: 

    1. Nick Battley, An Introduction to Commodity, Futures, & Options (1989).

  • Pages 109-125

Class 10: 

 

    1. Michael Greenberger, Interview with Ira Glass on This American Life (Click on "play" arrow, then skip ahead to 39:55 minutes into the broadcast). 

    2. "The Diane Rehm Show," NPR - Dec. 14, 2009, Professor Greenberger discusses financial regulatory legislation passed by the U.S. House. 

    3. "The Diane Rehm Show," NPR - Apr. 26, 2010, Professor Greenberger is part of a live discussion on the latest financial regulatory reform efforts on Capitol Hill. 

    4. "The Diane Rehm Show," NPR - June 28, 2010, Professor Greenberger gives a detailed overview of the financial regulatory reform package. 

(If hyperlinks aren't working, "The Diane Rehm Show" can be accessed here: https://dianerehm.org/shows -- sort by date). 

 

Class 11: 

 

Reading:

    1. Review pages 72-91 (Substituted Compliance--Conclusion) of INET Paper.

    2. http://graphics.wsj.com/how-the-world-has-changed-since-2008-financial-crisis/

    3. Unending DSIO No Action Relief

Francis King Carey School of Law

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