amarksp

Lehman's CDS Mess: Who's on the Hook?

Appears that cash and collateral may have been posted in the normal course of business prior to the 10/21/08 settlement date.
online.wsj.com/article...

"The actual cash payments that sellers have to make in the coming days will be significantly lower, because many firms had already posted cash or collateral to their counterparties on the contracts prior to last week's auction. In addition, most banks and financial institutions had both bought and sold swaps on Lehman's debt, so some of their profits and losses would offset each other."

I do agree with you that the total amount will be well over the $6B cited by DTCC. However, note this article:
seekingalpha.com/artic...