Credit Default Swaps

this is still my favorite chart until something else screws up and somebody charts it

 

so how do you know the solvency of the CDS counterparty or will I be afraid of the answer

 

you don't,

I'm surprised the CBOT and CME dropped the ball on this one, this is a huge market, and futures on a basket of these would have been a pretty volatile trading instrument. Probably would have upstaged the SPOOZ.

 

CDS.......Enron with a Coupon

 

in the OTC market, there are attempts made to do credit analysis on the counterparty.. In the case of LTCM, banks dropped the ball on this, and just used the "good name" of LTCM's partners to enable them to leverage up enough to knock all the players into a crisis.

 

Again, since the CDS is primarily an OTC instrument, you can do electronic trading to a point. Then, the particulars come into play. There can be some quite lenghty ISDA docs drawn up for a CDS trade, and what one would think is the "standard" is not necessarily done on a trade by trade basis.

 

I'm sensing a very hazardous moment on wednesday-thursday time point. Volatility levels overseas are increasing. With bubbles popping. Credit markets in terms of US Gvt. Bonds should enjoy inflows, in the very short term... couple weeks or so.

 

I cant seem to get a decent spread quote on sub prime vs. the 10 year but someone said the spread has blown out to 1200 basis points

 

I asked this question before in another thread, didn't get a good answer, so I'll ask on this thread:

ChiBondKing, you are in the know on this, so:

I want to place a trade that credit spreads are going to blow out.

Is there a way for the individual trader to make such a bet easily?

 

roflol