This morning General Electric (NYSE: GE) finally spoke up about the financial situation of the company. GE's chief financial officer, Keith Sharon, says worries about GE Capital are overdone, reports CNBC's David Faber. I have been ranting about this for months, most recently in Silence is not golden when it creates doubt.

Now at last we will have some transparency in the CDS (credit default swaps) markets. Regulators approved a joint venture between the CME (Chicago Mercantile Exchange) and Citadel, a hedge fund to clear swaps trades that will begin operations within 30 days. The size of this market is mind boggling at 54,000 billion dollars.

One of the underlying factors in our current credit crisis has been the lack of supervision in the CDS markets. Very often it was difficult and nearly impossible to figure out who the players were. You had the original parties to the CDS and then you had speculators who gambled on the credit worthiness of the underlying bond.

While this move to clear CDS trades is a good thing, it does not eliminate the speculation and risk taking by traders in the swaps market. That may never go away but at least it will be easier for trading managers to monitor their trader's actions more closely.

The New York Federal Reserve Bank and AIG have set up a special fund to buy CDOs (credit default obligations). They are buying $16 billion dollars of CDOs, which will free up the underlying credit default swaps and relieve some of the pressure from AIG.

CDOs have been one big factor in the credit crisis we are now facing. Not only AIG, but major banks as well are still holding CDOs "off the books." A big step forward toward more transparency would be for banks to disclose these CDO holdings and put them "on the books."

There is no way of knowing the total amount of these CDOs until there is full disclosure. These obligations are "hidden" from investors and it is difficult if not impossible to determine the share value of a given bank.

What are your thougts on this matter?

There has been much fear mongering in Washington over the last year as the financial crisis has built to a boil. But despite the most recent efforts to scare Congress and the American people into action, there has been very little light shed on some basic questions.

And I believe that before another penny of American taxpayers money is spent, our leaders need to spend more time explaining what is going on and why change is required. What we are facing is a crisis of confidence -- we are witnessing the erosion of trust in our leaders and our financial system.

People no longer believe our leaders have our best interests at heart. In the wake of the Auction Rate Securities scandal, people doubt the basic fairness of our system. People do not know the details of their accounts -- for instance few people have read the prospectus of their money market funds. And there is a lack of powerful ideas to sustain people's belief in the system.

Tragically, America's publicly-traded companies are hardly bastions of transparency and good corporate governance, but the problem is even worse in China.

A study by RateFinancials reported in Barron's (subscription required) found that on measures like quality of earnings, accounting, and corporate governance, Chinese companies are lacking.

Many Chinese companies listed on U.S. exchanges are tightly-held and have complex structures -- two serious red flags. They also don't have to file proxy statements, and often have the roles of chairman and CEO are filled by one person. There are also questions about the independence of the boards, related-party transactions, and so on.

What can investors do? Few would dispute that most people should have some exposure to foreign companies, and your best is to either buy an index fund or hand your money to a reputable mutual fund manager who has the resources to kick the tires on prospective investments in faraway lands.

If you think you have access to enough information/knowledge to perform proper due diligence on a company like LDK Solar (NYSE: LDK), I think you're kidding yourself.

This weekend's Financial Times (subscription required) highlighted an article which focused on the movement to end quarterly guidance. Those behind it -- namely Pfizer Inc (NYSE: PFE) CEO Jeff Kindler and Xerox Corporation (NYSE: XRX) CEO Anne Mulcahy -- feel the move would allow companies to focus on long-term goals rather than short term fixes. This is clearly an admirable goal, but what are the costs of such a move?

The biggest argument for this move, other than the stated objective of better running companies with a long-term vision in mind, is an increase in executive job security, allowing them more time to see through their visions for the companies they are charged to run (although some, especially certain Yahoo! shareholders, would argue against this being a positive). Moreover, this would end companies massaging financial data in order to "make" certain shorter-term numbers to keep said executives jobs. Not to say this change would stop corporate fraud -- it won't -- but it will end one reason for these fraudulent practices.

The most important argument against this move is a move away from corporate transparency, which investors have been fighting for a long time to gain. For investors to get on board with this, they must be promised clarity into the companies in which they invest in some other way. Additionally, they must also be convinced the change is genuinely for the long-term good of the company, and not just to keep fat-cat execs in positions of power a little longer.

Other interesting effects, should quarterly guidance disappear, are the possibility of lowered stock valuations in the face of greater uncertainty in companies performances, and lowered stock volatility in light of there being less data for stocks to trade on. These can be said to be uniformly good nor bad -- long-term value investors would probably see these side-effects as positive, whereas day traders certainly would not.