http://www.nakedcapitalism.com/2007/11/counterparty-risk-problems-with-credit.html This seems to be accurate?? So, we're talking 40-50% loss. i'm really glad I began studying for my series 7 because I have realized that you don't truly understand our economy until you understand the bond market.
boy, am I a contrarian indicator. I tripled my mbia short on friday after abk downgrade, then baron convinces the entire world to buy mbi and the fed cuts 75. luckly I was scared of a cut and the baron article and reduced the short on the pre-market, scapped part of the 40% squeeze cut but man this one hurt
I got the numbers from a Jim Jubak story posted yesterday on MSN money. $450T total and $27T net loss if it all comes apart. Jubak has a video on bond problems on MSN today. Cdntrader says $45T. I checked Wiki and they say the Bank for International Settlements said $28.8T in 2006 so maybe Cdntrader's numbers are better than Jubak's. Sorry for the delay. I just got back to this thread a few minutes ago.
45T is credit default swaps. Perhaps your are refering to all outstanding derivatives notional amount?
Well there was a bailout meeting after all with the banks and dinnalo. I believe some capital raising plan was discussed. maybe the banks will fuel some of the middle east money to the bond insurers but clearly the message is that saying MBIA will fail is a little like saying Citigroup or LTCM will fail, the authorities just wont allow it happen, the question lies on whether shareholders will be ignored in the name of saving the financial world and if there is money to be made shorting.
No, the CDS $450T figure is Jubak"s. Looks like he got it wrong and I passed on some bad info. Still, $45T could be a bit of a problem, but it looks like the powers that be are intervening to avert diaster. Jubak's article is titled "The Next Big Banking Crisis on The Way" on Jubak's Journal, MSN Money.