Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ramsey Su who wrote (67740)	8/8/2006 8:40:20 PM
From: mishedlo	Respond to of 110194

NO

To: Ramsey Su who wrote (67740)	8/31/2006 9:06:59 AM
From: YanivBA	Read Replies (2) \| Respond to of 110194

LCDS Settlement Rattles Credit Managers Some traditional credit fund managers are holding off entering the loan credit-default swap market because of uncertainty about how they would handle physical delivery of the underlying asset. Source: derivativesweek.com Also from same source: Credit Option Vol Slumps Option-implied credit volatility is following the lead of high-grade and high-yield credit spreads and drawing in to three month lows. This is despite the credit markets being hit by economic and political pressures including interest rate uncertainty, political turmoil in the Middle East and high oil prices. Implied volatility for at-the-money September options on the iTraxx Main dropped 2% last week to 32%, a full 11% tighter than a month ago. Similarly, CDS spreads on the iTraxx traded as low at 27 basis points Friday. One trader said the dip in volatility had not had a huge impact in the volumes of credit options traded. The growth of the market has been hindered this year by low liquidity. I am quite amazed how this fits with climbing bond spreads. One explanation that could be is a rise in counter party default risk, where traders question the ability of the insurer to honor the contract in the case where the reference bond defaults. YanivBA.