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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (16237)	1/11/2009 8:15:43 PM
From: RockyBalboa	Read Replies (2) \| Respond to of 71455

Anecdotally, default rates for October Lehman auction were low - but has anyone seen official figures? I have and they are very different. It was nearly a full default. See creditex.com The auctioned CDS settlements were an unseen high in the history of CDS settlements. The result was a price of 8.625 cents on the dollar for the bonds (in other words, practically the full notional of bonds failed). That means the seller of default protection had to fork over 91.375 cents on the dollar. Lehman bonds were trading at 5 to 10% on the screen. That´s why $400B had to be settled or so. There have been other auctions where CDS for senior debt was indeed settled for a 10% loss or better. Fannie and Freddie Senior debt was settled at 94 and 95.51% meaning practically no loss. Ironically, Fannie Mae Sub was settled for 99.90 , despite very different bids and offers. But not Lehman. Oh, and Tribune CDS was settled for - lo and behold, 1.5% (the loans for 23%). The debt of the iceland banks was indeed worthless. 0.125% for Landesbanki and Glitnir subordinates...