tag:blogger.com,1999:blog-30643134.post4712502600588750320..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: GE Capital and Credit Default Swaps: The Jump to HyperspaceAccrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-30643134.post-13592779222872740042009-06-01T13:32:03.053-05:002009-06-01T13:32:03.053-05:00Exchange traded CDS contracts only exacerbate the ...Exchange traded CDS contracts only exacerbate the real problem - a CDS is an insurance contract available without an insurable interest. Naked CDS contracts should be illegal, not more readily priced.Lawrence J. Kramerhttps://www.blogger.com/profile/06765377230733211459noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-9020152926149669862009-03-07T05:53:00.000-05:002009-03-07T05:53:00.000-05:00Citi found a great way to stimulate more CDS sales...Citi found a great way to stimulate more CDS sales. Shame the taxpayer will hold the bag if they fail:<BR/><BR/>http://bloomberg.com/apps/news?pid=20601109&sid=aZjMcuIoat7U&refer=exclusiveDCRogershttps://www.blogger.com/profile/05700101586810004089noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-11445955904780934042009-03-06T20:52:00.000-05:002009-03-06T20:52:00.000-05:00You probably heard about this by now but the SEC a...You probably heard about this by now but the SEC approved ICE for the CDS exchange. It launches Monday.<BR/><BR/>Thoughts?In Debt We Trusthttps://www.blogger.com/profile/05283475872936333396noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-9722584577108432752009-03-06T09:16:00.000-05:002009-03-06T09:16:00.000-05:00I think that AI's point, on the who the seller bas...I think that AI's point, on the who the seller base of CDS is, is crucial. If it wasn't "real" investors (or traditional investors) on the buy side, other than AIG, that is a problem, because that is the group that would short squeeze the market by moving CDS to a more rational price. In cash bonds, they are the other side of the trade. With no limit to the market and only one side of the trade being put on, this pricing is a problem.<BR/><BR/>Buying back debt sounds good in theory, but so does keeping cash and liquidity. That's a risky set of dice to roll...Credit Cruncherhttps://www.blogger.com/profile/04228194731491964542noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-39917472543740495712009-03-06T02:03:00.000-05:002009-03-06T02:03:00.000-05:00GE should just start buying back its debt at 50 ce...GE should just start buying back its debt at 50 cents on the dollar. They have enough liquidity to buy billions.<BR/>Equivalent to GE selling CDS's on itself.<BR/><BR/>Only this isn't some derivative fantasy. Rather it is simply buying the underlying. <BR/><BR/>http://capitalvandalism.blogspot.com/2009/03/how-ge-can-save-itself.htmlcap vandalhttps://www.blogger.com/profile/17179669039246988631noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-46674731851236864602009-03-05T19:51:00.000-05:002009-03-05T19:51:00.000-05:00Isn't it redundant to have both a CDS market and b...Isn't it redundant to have both a CDS market and bond rating agencies? If the rating agency give a company a triple-A rating but the CDS trades like a BBB rating, who you going to believe?<BR/><BR/>We should require the bond rating agencies to post a schedule of rates for each rating grades. If they rate a bond as AAA, they should be required to write CDS for the bond at the posted rate. A real case of putting their money where their mouth is. If they want to rate everything at the highest rating, they can expect to write a lot of CDS and shortly go out of business (like Ambac and MBIA almost did.)Advant Guardhttps://www.blogger.com/profile/13724697741711826082noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-56964094059465531112009-03-05T18:43:00.000-05:002009-03-05T18:43:00.000-05:00I find it a strong conflict of interest when CDS b...I find it a strong conflict of interest when CDS buyers buy junk bonds so they can sit on the stakeholders' seats and push for insolvency. Any losses they incur on the bonds (which are already trading at pennies on the dollar) are more than made up for by their exponential CDS payouts.In Debt We Trusthttps://www.blogger.com/profile/05283475872936333396noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-81006981409939310532009-03-05T17:08:00.000-05:002009-03-05T17:08:00.000-05:00I think you're too pessimistic on CDS. I agree tha...I think you're too pessimistic on CDS. I agree that some names are not that liquid at all but Financials CDS are some of the most liquid names out there and I can normally get $100mm done no problem at most 20bps wide. I also normally see about 5+ dealers making reasonable-sized markets on GE. You also don't need much balance sheet as a dealer to trade CDS since it's a derivative ie not a funded product like a bond which would require a risk-weighted asset charge.<BR/>http://www.acredittrader.comUnknownhttps://www.blogger.com/profile/04858337126356547025noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-24032614173809070462009-03-05T16:10:00.000-05:002009-03-05T16:10:00.000-05:00I agree this sounds great, but how long would it t...I agree this sounds great, but how long would it take Wall Street (or whatever eventually takes its place once its disappearing act is complete) to create a CDS-like thingy that has almost all the characteristics that would require registration with the exchange, but not quite all? I'd have to think that's where all the big money would eventually end up, private contracts between 2 parties, with minimal disclosure to anyone else. Then we lever them up 99 to 1 again.............you can see where this is going. It may take a while but it will happen. Unless we take the extreme step of requiring ownership of the underlying bonds before buying CDS, another thing that sounds great in theory but just is not workable.Hawkeye0915https://www.blogger.com/profile/05128032736593469063noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-34080146233188814532009-03-05T15:07:00.000-05:002009-03-05T15:07:00.000-05:00Amen. The question then becomes why hasn't we made...Amen. The question then becomes why hasn't we made any progress with an exchange-traded CDS market. I realize the dealers don't want it, but why can't the CME get this started? Seems like a great opportunity for them to step in...I'm sure their other businesses are going to be hurting this year as volume drops.Aaronhttps://www.blogger.com/profile/13134333049361397327noreply@blogger.com