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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (106345)	1/11/2010 9:41:24 AM
From: Hawkmoon	1 Recommendation Respond to of 116555

Sorry I was not clear on that. LOL!! Ok.. was wondering WTF since you've been so adamant against derivatives and CDS are the mother of all (unregulated) derivatives.. ;0) And you never know about "naming names". These CDS are counter-party contracts that, likely, are not public. They are betting on the failure of those bonds and it's worth more to them that they do fail, than if they get converted into equity, or even paid off. So the holders of those CDS contracts, who were blocking the conversion of debt to equity would not want to have their names in the open. So I'm inclined to believe it was a threat, but who can say if Hoffa had the names of the counter parties? Btw, this is my opinion. There will be no TRUE financial or economic recovery until CDS fall under insurance regulation. And since CDS markets are global, this means, somewhere and somehow, international regulation is going to proposed (if they haven't been already). The banks have money to lend (depending on their specific reserve requirements and leverage), but the financial surety sector has been gutted. And few people will risk taking on debt if they can't diversify their risk. And risk won't be diversified while CDS contracts FAVOR those who have purchased them. Hawk