Much of this article has been overtaken by events, but parts remain worth noting:

For most investors, just getting default-swap prices is a chore. Unlike stock prices, which are readily available because they trade on a public exchange, swap prices are hard to find. Traders looking up prices on the Internet or on private trading systems see information that is hours or days old.

Banks send hedge funds, insurance companies and other institutional investors e-mails throughout the day with bid and offer prices, Backshall says. For many investors, this system is a headache.

To find the price of a swap on Ford Motor Co. debt, for example, even sophisticated investors might have to search through all of their daily e-mails, he says.

“It’s terribly primitive,” Backshall says. “The only way you and I could get a level of prices is searching for Ford in our inbox. This is no joke.”
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Banks have a vested interest in keeping the swaps market opaque, says Das, the former Citigroup banker. As dealers, the banks see a high volume of transactions, giving them an edge over other buyers and sellers.

“Dealers get higher profitability through lack of transparency,” Das says. “Since customers don’t necessarily know where the market is, you can charge them much wider margins.”

For shame. If the contracts are standardized and a transparent market is created, public-spirited short sellers can contribute to price discovery and help prevent recurrence of the present debacle…