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

To: Ramsey Su who wrote (69199)	8/31/2006 3:32:04 PM
From: YanivBA	Read Replies (2) \| Respond to of 110194

Would it not be a mathematic calculation to buy CDS "insurance" if the rates are cheaper than my expected losses? Yes, I believe most math PHD's would think this way, wouldn't they? It takes some actual thinking to quantify counter party risk and over saturation risk. Is that "insider" information? I don't think this would count as insider information. Most probably the insuring party has access to the same kind of data. After LTCM, I am just so skeptical of these fancy instruments invented by geniuses We have a credit default market that never saw actual defaults. The few that it has seen were all a mess. Right now it is all running on mathematical models. On theories. Being a little mathematically inclined I have to say I have zero faith in the assumptions required for the models. They will all break down on the first real test. YanivBA