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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 8931
Forum Topic:

Gold, Oil & Indices (Equity & Bond Indices)

Discuss Gold, Oil & Indices (Equity & Bond Indices)
 
montmorency
Abingdon, UK
Posts: 610
12 years ago
Feb 9, 2011 0:15
I wonder who can possibly be underwriting these CDSs? I mean if a major economy defaults, who is possibly going to be around to pay the winnings on the "bet"?

asad
London, UK
Posted Anonymously
12 years ago
Feb 8, 2011 22:35
Liquid at 86.15. Biiiiiiiiig liquid!

Remember I wrote last week 89 - 85 would be session or two?! ;)


Asad


P.S. 83 seems like a reasonable long...
catnip
Germany
Posted Anonymously
12 years ago
Feb 8, 2011 21:22
Sure it is mainly speculative. But anyway speculators don't just buy right away usually some have deeper insights in money- and credit markets than a simple forex trader.
usikpa
Moscow, Russia
Posts: 77
12 years ago
Feb 8, 2011 20:14
Catnip,

Time for a discussion on what a risk free rate is in the current environment?
:))

Seriously though, I would presume this must be something rather technical. CDS contracts are thing of their own, there are contracts out there for sovereigns that DON'T have any sovereign debt.

Just a thought
catnip
Germany
Posted Anonymously
12 years ago
Feb 8, 2011 18:12
from CNN
Trading of U.S. credit default swap contracts has more than doubled in recent weeks. Prices have also risen as more investors take out insurance on U.S. debt.
In the past year, a growing number of investors are buying what's known as credit default swaps on AAA-rated nations like the U.S., U.K. and Germany. There has been a 75% increase in activity in the U.S. debt market alone.

Billions of dollars in AAA-rated sovereign debt are now packaged in the CDS market. The growing interest in these products highlights a notable, but small, number of investors who feel the need to protect themselves financially from even the low possibility that the U.S. could default on its debt.

Massive bets on credit default swaps, and similar alphabet soup-like derivatives in the wake of the subprime mortgage meltdown, are one of the reasons why banks like Lehman Brothers and insurance company AIG (AIG, Fortune 500) imploded.

Since the European debt crisis began more than a year ago, interest in credit-default swaps has been on the rise again. This time, the swaps are being written not on residential mortgages and the financial firms with ties to them, but on the debt of countries.

Critics fear these instruments could be used by speculators to attack fiscally challenged governments.

For now, the market for U.S. CDS products is relatively small and illiquid. But it's growing. Data provided by the Depository Trust and Clearing Corporation, a clearinghouse of over-the-counter products, shows 678 CDS contracts trade on U.S. debt, up from 392 contracts a year ago.




usikpa
Moscow, Russia
Posts: 77
12 years ago
Feb 8, 2011 16:43
Also, Ashraf,

Looking at the steepeners, 2y10y and, especially seemingly topping 2y30y, one would presume this rally has less than a month life support left to it. Would you agree?
usikpa
Moscow, Russia
Posts: 77
12 years ago
Feb 8, 2011 16:35
Ashraf, what's the story with the Euro, gold and silver today?

Up on all cylinders? Eur/chf up to 1.31?
Ashraf Laidi
London, UK
Posts: 0
12 years ago
Feb 8, 2011 15:50
My Video Charts Analysis for Reuters Thomson charting Yields vs SP500

Revisiting gold resistance
http://link.reuters.com/cyp87r


Ashraf
Ignore
United States
Posted Anonymously
12 years ago
Feb 8, 2011 13:22
lol ok Bolt..have you announced your Ameri currency plan yet for N. Amer?
Tony G
Posted Anonymously
12 years ago
Feb 8, 2011 13:20
Just as with Mubarak, it's only a matter of time before people power takes away the FED's remit. once this happens only the bankster minority and their supporters will suffer.

Rise up people against the tyranny of the FED.