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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (90397)	5/19/2012 12:03:34 AM
From: Maurice Winn	2 Recommendations Respond to of 219888

One of the reasons I didn't get into such currency dealing 25 years ago was the counter-party risk. < JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc., two of the top CDS underwriters in the U.S., say they have bought more protection than they sold, indicating they may benefit from defaults in the region. > Yes, on paper, JPM and Goldman might benefit from defaults. But what if "the protection" they have bought is to be provided by companies or people who when asked to provide said "protection" explain that they are very sorry, but the insurance premiums have been spent already so there is no protection? Given the financial shenanigans which went on over the last decade, it seems a very good bet that the management of JPM and Goldman might even have considered the possibility that the "protection" might not be actually there when push comes to shove, but what the heck because they will have banked their bonuses a year or 4 before the chickens come home to roost by which time it will be somebody else's problem. Given the perverse financial incentives, it would be surprising if the "protection" is in fact there. Alan Greenspan KBE was shocked at the last big bust when he realized that shareholders of banks were NOT in fact looking after their own interests and that the management had put the whole show at risk for temporary profits and of course bonuses. Mqurice