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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: regli who wrote (67471)	8/4/2006 10:03:45 AM
From: YanivBA	Read Replies (2) \| Respond to of 110194

I know it! This is proof! Lisa Watkinson, head of structured credit business development at Lehman Brothers, says that in the unsecured CDS market, the total exposure underlying derivatives contracts has mushroomed to become worth a multiple of the value of the actual unsecured debt trading in the cash, or physical, market. regli, can you please also post this one: ft.com I believe I know why junk spreads have kept going down. YanivBA

To: regli who wrote (67471)	8/4/2006 11:50:06 AM
From: YanivBA	Respond to of 110194

one problem for the LCDS market so far has been a shortage of buyers of protection, such as lenders hedging loan exposure or investors taking a negative view of credit. "(At a recent conference) the joke was there were 400 in attendance, but 398 were protection sellers and only two buyers," says Mr Price. Funny, I don't laugh. I guess everyone who needed protection got it and the pool of speculators has run dry. Q: Do you know what is the value of the underlying bond in an over-saturated CDS market on the day the company files chapter 11? A: Par value. Who needs protection? I am selling it for free. (I know I already sold more CDS notes than there are bonds) YanivBA.