tag:blogger.com,1999:blog-6399730406480392183.post1651264352133315527..comments2024-03-27T11:18:34.222-03:00Comments on Viable Opposition: European Debt Credit Default Swaps - The Next Crisis?A Political Junkiehttp://www.blogger.com/profile/03342345936277964422noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-6399730406480392183.post-90374834297301815522015-07-01T04:47:21.876-03:002015-07-01T04:47:21.876-03:00Nice blog i am just passing by and i start reading...Nice blog i am just passing by and i start reading your blog i really like it...<br /><br /><a href="http://tradecreditrisk.com.au" rel="nofollow">Insurance Brokers Melbourne Victoria</a>Anonymoushttps://www.blogger.com/profile/06861772041285393524noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-62271204457222816162013-09-19T03:05:10.654-03:002013-09-19T03:05:10.654-03:00It is best to be prepared financially in case a se...It is best to be prepared financially in case a serious debt crisis comes on our way.What is income protection insurancehttp://www.trueinsurance.com.au/bill-cover-insurance/noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-69355559485587882662012-03-24T21:10:38.381-03:002012-03-24T21:10:38.381-03:00The average person not understanding is the proble...The average person not understanding is the problemAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-48225044695524409422012-03-24T21:07:18.872-03:002012-03-24T21:07:18.872-03:00Bankers are all crooks.
A Valid statement- Why hav...Bankers are all crooks.<br />A Valid statement- Why have a bank account?<br />Why have a checking account? They are all just a place to store your money if you are unable to hide it inside your house.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-61802260509690667142012-02-13T17:12:02.766-04:002012-02-13T17:12:02.766-04:00A printable version?A printable version?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-10291375373131182582011-12-07T10:03:39.199-04:002011-12-07T10:03:39.199-04:00Crap, I thought I had fixed the problems with my c...Crap, I thought I had fixed the problems with my calculations days ago. Apparently, yet another brain fart and I reposted the same posting with the errors intact. My profound apologies. It certainly is a good thing that I don't get paid to do this!<br /><br />...and you're right, bankers make these "investments" pretty opaque to the 99 percent of us that have a basic checking account.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-15999181751147049332011-12-06T10:28:12.517-04:002011-12-06T10:28:12.517-04:00After reading all this I still don't understan...After reading all this I still don't understand any of it but then again I'm not an investing person. Bankers are all crooks. The average person can't even understand what they are doing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-27005339817681373592011-12-06T03:23:11.635-04:002011-12-06T03:23:11.635-04:00"According to the Bank for International Sett..."According to the Bank for International Settlements, guarantees provided by United States' banks rose by $80.7 billion in the first half of 2011 to $518 billion, most of which are CDS on Greek, Portuguese, Irish, Spanish and Italian government debt." <br />are you tring to say, that the new wall street game started just half a year ago? if so, is this the way american banks are trying to refinance themselfs?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-25684680122375866452011-12-06T01:42:01.131-04:002011-12-06T01:42:01.131-04:00You still have Germany and Portugal mixed up in th...You still have Germany and Portugal mixed up in the cost of CDSs. <br /><br />What gets me is that you have to pay 80% of a Greek bond price to get a CDS even though the ECB has twisted the arm of the CDS governing board so that they say there won't be a "Credit Event". If that's the case, why is the price so high and why would anyone buy one at any price? Which is true of all of them - why would you want something that will only pay off if the ECB says it will pay off and the ECB is determined that they will not?Bubhttps://www.blogger.com/profile/07367554651401120819noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-59971755628552666372011-12-05T23:34:20.854-04:002011-12-05T23:34:20.854-04:00As Moderate Poli points out, your logic is better ...As Moderate Poli points out, your logic is better than your arithmetic (the German CDS cost quoted also seems a bit excessive).<br />But I'd like to hear your thinking on the idea of banning "naked" CDSing (like naked shorts).John Matthewsnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-12097863105678407822011-12-02T22:48:27.967-04:002011-12-02T22:48:27.967-04:00Hedging a hedge. Now there's a recipe for dis...Hedging a hedge. Now there's a recipe for disaster. Despite what you may think, some experts are already very concerned that the recent chaos in the sovereign debt markets could expose the flaws inherent in the use of CDS as a means to manage the risk of default. If a bond fails, you expect to collect on your CDS. What if the insurance fails? As well, the recent negotiations with Greece may mean that the solution (a haircut) may result in avoiding the CDS trigger mechanism, leaving holders of Greek debt out of luck.<br /><br />Read this:<br /><br />http://www.euromoney.com/Article/2913936/Sovereign-CDS-Market-chaos-exposes-CDS-hedging-flaws.html<br /><br />...but thanks for your input anyway.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-40239999202566083402011-12-02T18:55:22.966-04:002011-12-02T18:55:22.966-04:00This is nonsense. Most of those CDS positions are...This is nonsense. Most of those CDS positions are hedged.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-84987519680817685772011-12-02T16:52:43.469-04:002011-12-02T16:52:43.469-04:00Moderate Poli
You are right and I was having a br...Moderate Poli<br /><br />You are right and I was having a brain fart. Note the fix.<br /><br />Thanks. I guess I got my points and percents confused. Good thing I'm not a CDS trader!A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-52467748998941380502011-12-02T11:27:58.546-04:002011-12-02T11:27:58.546-04:00Great explanation! What are CDS good for anyway? ...Great explanation! What are CDS good for anyway? <br />Thus far into the Eurozone crisis, there has been no formal default, so the overleveraged borrowers have received not real debt relief such as longer tenors or lower interest rates. <br />And overextended creditors have not been able to draw on the CDS coverage they had purchased, so many have been stampeded into selling Eurozone assets at deep discounts. <br />This might do away with moral hazard in lending once and for all... <br />See the view from Lisbon in PPP Lusofonia blog <br /><br />http://ppplusofonia.blogspot.com/search/label/CrisePPP Lusofoniahttps://www.blogger.com/profile/13027335388583446474noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-668501462468104152011-12-01T20:34:44.893-04:002011-12-01T20:34:44.893-04:00I hope you can excuse me for being such a nerd, bu...I hope you can excuse me for being such a nerd, but there is either a math error or I'm misunderstanding this:<br /><br />"to insure 10 million euros of Portugal's debt would cost you over 10,000 euros per year and Ireland would cost you about 7000 euros."<br /><br />My reading of the chart on the original site is that it's thousands of euros to insure 10million euros. That would make over 1 million euros to insure Portuguese debt and 700,000 euros for Irish debt. <br /><br />As an American, I certainly hope my government won't be bailing out anyone caught short by backing or receiving CDSs. 2008 was enough.ModeratePolihttps://www.blogger.com/profile/01721945380057992971noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-34505284430079351542011-12-01T19:23:55.771-04:002011-12-01T19:23:55.771-04:00"With the bailout of Greece, private investor..."With the bailout of Greece, private investors in Greek CDS were asked to take a 50 percent haircut..."<br /><br />Should that read "Greek bonds"?<br /><br />I thought the Greek bailout plan was to be "voluntary" so there would be no credit event and the CDOs would not get triggered.<br /><br />The politicians did not want to see the CDO (shadow banking) market tested in case it failed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-89000463513607417092011-12-01T18:28:00.539-04:002011-12-01T18:28:00.539-04:00Hi Don,
You are exactly right. No default, no pa...Hi Don,<br /><br />You are exactly right. No default, no payout. Think of it as shorting a stock or buying insurance and never making a claim.<br /><br />Goran,<br /><br />I have also read "The Big Short" and it made me want to hide my meagre savings in a mattress! As far as the U.S. goes, I think that, right now, they are getting a pass because the USD is the world's reserve currency. As I noted in the posting, if you look back to early 2010, all Eurozone countries had relatively low CDS. Things changed rather dramatically and my philosophy is that, ultimately, the same thing could happen with the US debt.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-25696087206026390342011-12-01T13:19:25.375-04:002011-12-01T13:19:25.375-04:00You use Germany as a pillar for fiscal responsibil...You use Germany as a pillar for fiscal responsibility, hence their CDS is at 98, but the US CDS is at even lower rate at 50. Shouldn't that mean that the US should be used as a mark for fiscal responsibility despite their $15.1 trillion debt, because they're even less likely to default than Germany if we are to take the CDS list at face value?<br />I totally agree that the lesson of 2008 has not been learnt at all, and I read Michael Lewis's ''The big Short'' which explains in ordinary language how it all happened and goes deeper into the nature of CDS and CDO's.<br />The author claims that the whole of WallStreet didn't know what they were doing, and only a handfull individuals seem to have known what was really going on. I wonder how much of WallStreet and politicians know whats going on again, for to me it looks like they don't, cause if they at least had understood what happened in 2008, they'd have done something by now to regulate those toxic and dangerous CDS and CDO's, and since that has not been done, I'm thinking a bigger short is at hand the Michael Lewis' 2008 Big Short...Goran Josifovnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-87248664262241544042011-12-01T11:52:04.042-04:002011-12-01T11:52:04.042-04:00APJ:
Thanks so much for this explanation.
If the b...APJ:<br />Thanks so much for this explanation.<br />If the bonds do not default, what does the buyer get - nothing?<br />If that is the case, he is betting that the bonds WILL default!<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-36390466186131315762011-12-01T08:54:29.706-04:002011-12-01T08:54:29.706-04:00Well done. The bizarre world of CDS is starting to...Well done. The bizarre world of CDS is starting to come into focus. Thanks for that.Bernard Palmerhttp://www.primaryfundamentalright.org/index.php?pageName=pfrWhatIsnoreply@blogger.com