Category Archives: credit default swaps

Greek Debt Negotiations – Opa!

I’ve been following the Greek Debt Negotiations and it’s been a really fascinating story. It’s amazing how much the derivatives market has complicated the process. Normally when a country defaults, a debt exchange often takes place. That is the original … Continue reading

Posted in credit default swaps | Tagged , , , ,

Perils of Paulson

Henry Paulson and Ben Bernanke may be escaping from the precipice of one horrific calamity, only to be breathing a sigh of relief just as an even worse catastrophe looms. The plan to buy distressed mortgage related assets and derivative … Continue reading

Posted in Commentary, credit default swaps

The Secretive Nature of Hedge Funds vs. the Open, Public Process of Bankruptcy in the U.S. – An Update

Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York signed an order yesterday dismissing the Chapter 15 case of Basis Yield Alpha Fund. The dismissal was made at the request of the Cayman Island … Continue reading

Posted in Bankruptcy, Basis Capital, Commentary, credit default swaps | 1 Comment

A Clearing House For CDS Trades?

Deutsche Bank and other investment banks are evidently considering plans to develop a clearing house for credit default swap trades. The $62 trillion market (up from less than $2 trillion in 2002) has given rise to substantial fears of “counterparty … Continue reading

Posted in credit default swaps

A Little Noted Case Regarding Credit Default Swaps Could Portend Major Problems for Financial Institutions

In response to my recent postings regarding credit default swaps (CDSs), a professional acquaintance was kind enough to refer me to a relatively recent decision. Aon Financial Products v. Societe Generale, 476 F.3d 90, issued nearly one year ago by … Continue reading

Posted in credit default swaps, Overhedged | 3 Comments

More on CLOs and CDSs

Today’s NY Times column by Floyd Norris reflects concerns regarding collateralized loan obligations (CLOs) and credit default swaps (CDSs) similar to those in last week’s postings here (below). The evaporation of the CLO market has substantially reduced the demand for … Continue reading

Posted in Commentary, credit default swaps, Financial Commentary, Overhedged | Tagged

Credit Default Swaps: Tick, Tick, Tick, Tick . . . .

The evaporation of the collateralized loan obligation market (see post below) may be the other shoe dropping. The risks posed by credit default swaps (CDSs) may be not just the other shoe, but the neutron bomb. The rating cut by … Continue reading

Posted in Commentary, credit default swaps, Financial Commentary, Overhedged | Tagged , | 3 Comments