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Strategies & Market Trends : Value Investing

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From: Spekulatius	10/5/2011 1:32:03 AM
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CDS (credit default swap) quote in Bloomberg - here is a blog post that links to a bunch of them. Note that the CDS not only refers to the credit risk of the named company but also to the credit risk of the writer of this insurance, which is not named. Anyways, i found it interesting that AA rated BRK CDS is at 275BPS, same level than Dow Chemical (ironically BRk loaned Dow money via a preferred when they were reeling in Y2008 after that ill timed acquisition. MS CDS is at 600BPS, higher than BAC (450BPS) and much higher than those of french banks (that are hanging at 275BPS) even though MS is considered vulnerable to French bank default risk. Wild west anyone? This should be studied by those efficient market economist. I'd love to hear an explanation for what is happening there. distressedvolatility.com

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