... as long as gvts. collateralize the banks CDS baggage we have gvts. indemnifying the hookers for nights of commerce & passion that didn't work out in a profit.
This Monday's opening will be a sight to behold. Will Europe crack first? or, will Asia breaak open like an ancient rotten egg on rumours from Europe? Watch CNBC Sunday night 7 pm for the answer.
Best to you all,
Clark
From zero hedge ... letters to the Editor .... heavens! Have we lost all faith?
zerohedge.com
dumpster
on Sat, 05/08/2010 - 13:56
#338198
The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. By doing this, the risk of default is transferred from the holder of the fixed income security to the seller of the swap.
these are unregulated, with no oversight , but the seller receives a premium to cover the risk . as the debt implodes the buyer looks to the credit worthiness of the seller to cover debt.
the ultimate seller is a hot dog stand in Bangladesh
the large banks ,, hedge the bet with shorts against the debt
the country or entity goes bankrupt not being able to collect . the fee lost .
the big banks make trillions on the bet against the credit swap.
these things infest the very guts of financial arrangements... are grinding away and will bring down all indebted countries.. the Europeans the USA, yadda .... yadda.
williambanzai7
on Sat, 05/08/2010 - 10:28
#337934
In one week we have gone from bailing out Greece, to talking about bailing out Spain to talking about bailing out all of Europe.
Its not just the speculators they will have to neutralise, it is the entire hollow teetering edifice, chuck full of all that deep liquidity we all saw in brilliant technicolor on Thursday.
Let the force be with them.
dumpster
on Sat, 05/08/2010 - 11:44
#338006
Fed and ECB to attack speculators when they least expect it.
the fed is powerless .
sinclair
The name of the "Roulette Wheel" is Credit Default Swaps. It does not matter what the G-7 or the G-20 does. It does not matter what the IMF, ECB and Fed under a beard do. Mrs. Merkel’s foolish political strategy fits right into the equation.
CDS are going to take down every major currency, making trillions for the players. It will in time turn on the USA as it is already operating against the financially weaker Illinois and New York debt.
The dollar, as it gains ground due to the mirror image of the euro, becomes weaker and weaker due to overvaluation with no fundamental legs. The dollar’s time will come.
The OTC derivative credit default swap is about to clean the clock of the world. Der Spiegel is right but the debt is there. It |
