Spreads are holding firm this morning on this very light news flow day.

Yesterday's new issue from Viacom saw a slight upsize due to demand; the 10 year bonds are trading this morning about flat to where they were issued yet the 5 year bond is trading about 10bps through issue spread.

Stealing a page book from Rahm "Never let a crisis go to waste" Emanuel, the CFTC is making a move to 'enhance' the current derivatives regulation proposal. This occurred despite Geithner's urging of agency heads to stop campaigning for changes.

While I have been concerned about the Vix's attempt at a move higher, it seems that the last 6 days have seen the index move higher on the open but close lower on the day.

Given the lack of other things to write about, I've perused the most recent DTCC data on credit default swaps. The only thing that caught my attention was a healthy spike in the amount of swaps referencing Credit Suisse (granted it was off a relatively small base).

While it is clearly dull as dishwater, I'd like to keep people's attention on the debate over mark-to-market accounting. The most recent salvo comes from Nobel prize laureate Robert Merton (and others) supporting the use of mark-to-market (aka fair value).

This blurb from StructuredCreditInvestor points out an interesting conundrum with regard to structured product payouts in the event of the Lehman bankruptcy. While technically, investors in a typical ABS should receive an 'accelerated' payout in the event of (some) default, this court case says that should not be true as that would be 'favoring' some creditors over others.