AnonymousAlso

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

Why do CDS have anything to do with it? They are marked to market every day so most of the money is likely made before the bankrupty.

Plus, a 'credit event' which is what triggers payout on a Credit Default Swap doesn't have to be a bankrupty. A debt reorganization is likely to be treated as a 'credit event'.

Look at what happenned at Fannie & Freddie when they were taken over - but not bankrupted - that triggered payouts on the credit default swaps.

How to Not Pay the AIG Bonuses

Some of the contacts are with non-US employees in other countries. Given how much other countries are unhappy with us it might be interesting to see how those courts rule if the AIG decides not to pay.

The Underwhelming Frannie Loan-Mod Plan

"The resulting Fannie Mae MBS carries a guarantee of timely payment of principal and interest to the investor, whether or not there is sufficient cash flow from the underlying group of mortgages."

What is the effect on the MBS holders? Who makes up the difference?

Three Problems with the Fannie / Freddie Mortgage Modifications

"The resulting Fannie Mae MBS carries a guarantee of timely payment of principal and interest to the investor, whether or not there is sufficient cash flow from the underlying group of mortgages...."

Does this plan change the guarantees to the bondholders? Or who makes up the difference?

A Relief Rally, But Is Anyone Really Relieved?

I don't see why LIBOR has much to do with interbank lending. Just a few months ago we were told the numbers were being minipulated by the 16 banks that set it, only 3 US banks. US banks don't need to borrow via LIBOR as the Treasury is just about giving the money away to them.

My guess is LIBOR rates are more closely related to the disappearance of the non bank lending - investment banks, the drop in the size of the CP market or maybe money market mutual funds pull back from very short term corporates.

Settlement Auction for Lehman CDS: Surprises Behind

Maybe Morgan & Goldman as part of this deal to become BHC are minimizing their particpiation in this area? Goldman just got $10 billion + and one would guess Buffet who appears to dislike these kind of things would have looked carefully.

In addtion the centeral warehouse / clearinghousefor CDS comments that the net transfers on Lehman will only total about $6 billion. Does that jib with what you see?

Lehman's Loss: More Than $200 Billion

How often are CDS marked to market? Every day? Every week? Every month? How often are payments exchanged? Only at settlement? That is in this case 10/21? Or have payments been exchanged thru the lifetimes of the contracts at periodic points?

The CME's CDS exchange marks to market twice a day?

Misconceptions on the Credit Default Swap Market

Define insurable interest. Against a bond? Against a stock? Against a line of credit? Seems like a lot of wiggle room.

We're in an Opacity Crisis

Maybe the SEC should make a bunch of their regulation that is voluntary – required? Like the oversight of investment banks was? Like the oversight of NASDAQ is? They just have been too busy to write the rule.

Isn’t the Treasury Direct programming a way for retail investors to purchase Treasuries?

Require all derivative products to trade thru a central exchange after a product has reached a certain size. For instance say $100 billion in notional size would have bought the CDS under supervision in 1998-1999. (When this was first discussed but various federal agencies couldn’t decide who should do it.)