searcher

An ETF for Subprime Debt?

Same reasoning applies to any pool established to buy discounted assets. CEF, ETF, ETN, even LP's. It's going to happen but the question is when.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Promises - promises. Pomises to make good on promises of others. Any transaction that is not face to face and involving exchange of actual objects requires representation. Either or both representation of payment or value to be received; from thence abstraction ensues and...we're off to the races.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Following the bouncing ball:

Cactusbrush
“"Remember, only a small portion of these positions are actually hedging exposure in the form of the underlying securities. The rest are speculative, in some cases 10, 20 of 30 times the underlying basis."

I don't quite understand this bit, perhaps you could expand on how this actually works. I get that a big part of the problem was people buying insurance on the Titanic from people on the Titanic. But are you saying that most CDS were not insurance at all, but actually bets with bookies on whether the Titanic would hit an iceberg or not? Does that make them like the mother of all naked shorts?”

Steve Pluvia
“Most do not understand Lehman, Merrill et al packaged ANYTHING with a revenue stream almost ANYWHERE IN THE WORLD into an asset back security, then created synthetic "bonds" when they found it easier than rounding up assets with revenue.”

Kinabalu
“..many CDS sellers were small subsidiaries of hedge funds that wanted the premium income but never had the financial wherewithal to pay off on any claims..”

BerkeleyBob
“2) AIG appears to have been at the fulcrum of making book on leveraged CDO's and credit default swaps which were purchased by entities having no insurable or legitimate hedge interest in the underlying assets. It was not insurance, not regulated, and required apparently no reserve.”

AIG to Honor ETC Debt

Yes, we are already seeing the Euopean consolidation. "Massive" is problematical.