nakedcapitalism.com - 13 days ago
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David Einhorn, who enjoys his considerable reputation for hard-fought battles against firms with shaky finances and dubious accounting (Alliance Capital and Lehman), has taken aim at a new and equally deserving target: credit default swaps.
In an interesting bit of synchronicity, ...
informationarbitrage.com - 13 days ago
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informationarbitrage.com —
David Einhorn is without question an exceptionally bright
man and a very astute investor. However, the latest
message being delivered from his bully pulpit, proposing a ban on credit default swaps (CDS), is misguided at best and dangerous at worst. ...
(more)
Deal With It, Mr. Einhorn
fridayinvegas.blogspot.com - 12 days ago
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fridayinvegas.blogspot.com —
warning: this post will require you to be
able to intelligently ponder philosophical concepts and theories, and
perhaps try to forget some assumptions you may already have. I failed in my attempt to explain the concepts below in a comment ...
(more)
Abstract Thoughts on CDS and the Fallacy of Insuring ...
nakedcapitalism.com - 15 days ago
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nakedcapitalism.com —
As Gillian Tett points out in the Financial
Times today, clearing derivatives centrally has come to be
viewed in policy circles as a magical solution. As a result, it has not gotten the scrutiny it deserves. The reason for the enthusiasm is that, ...
(more)
The Fantasy of the Clearing House Magic Bullet
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Are Credit Defaults Swaps the Tool of the Devil?
Paul Kedrosky's Infectious Greed —
... under-reserved , which creates asymmetric risks. It is possible to write swaps (far) exceeding the notional value of the thing for which you are writing all the swaps. That’s … not good, like being able to create total policies far exceeding the value of a house, thus making it urgent to burn the house down as soon as possible. Anyway, here is Einhorn’s original, followed by two takes on opposite sides: Einhorn against credit default swaps (FT) Ehrenberg: Deal with it Dave (IA) Yves: First, let’s kill ...
Credit Default Swaps: Proudly the Tool of the Devil Again
Paul Kedrosky's Infectious Greed —
... the thing for which you are writing all the swaps. That’s … not good, like being able to create total policies far exceeding the value of a house, thus making it urgent to burn the house down as soon as possible. Anyway, here is Einhorn’s original, followed by two takes on opposite sides: Einhorn against credit default swaps (FT) Ehrenberg: Deal with it Dave (IA) Yves: First, let’s kill all the credit default swaps (NC) Feel free to find yet another position to stake out in comments. ...
Sunday links: hard knocks
Abnormal Returns —
... Roger Ehrenberg, “Sadly, we live in a world of sound bites, and Congress and the White House have found far better sound bites to attack the denizens of the equity markets rather than the derivatives and debt markets.” (Information Arbitrage)
David Einhorn calls CDSs “anti-social” and calls for their ban. (FT also Information Arbitage, naked capitalism, Kid Dynamite)
How big a role did the ...
Lunchtime Links 11-8
Rolfe Winkler —
... because without them the division of labor breaks down.
Big bank break up idea gains ground in Congress (Drawbaugh, Reuters) Senator Sanders just introduced a bill to do that. As noted earlier, Kanjorski is working on amendment to do same.
Treasury to block sale of Fannie Mae tax credits to Goldman (Reuters)
Hedge fund giant surfaces in insider trading probe (Pulliam, WSJ) Steve Cohen’s SAC Capital is now under the microscope.
Einhorn: first let’s kill all CDS (NakedCapitalsim) The post refers to comments from ...
David Einhorn vs the bloggers on credit default swaps
FT Alphaville —
... can be sliced, diced and priced? I have no idea. But banning CDSs is akin to banning Twitter. Are there some negative outcomes associated with using each of these tools? Sure. But do their overall benefits outweigh their costs? I believe so. (FT Alphaville would posit that a ban on Twitter might actually be more beneficial than a ban on CDS, but then we’re neither technologists nor venture capitalists) At the other extreme was Yves Smith, a long-time anti-CDS campaigner, who declared : Credit default swaps have no redeeming social value Paul Kedrosky took something of a ...
Related Content
The magical world of credit default swaps once again
blogs.ft.com 6/15/2009 — To think I believed I had seen it all as regards creative uses and abuses of credit default swaps (CDS). But then came Amherst Holdings.
A credit default swap written on a security (a bond, say) is a contract that pays the owner a given amount when ...
Are CDS a good thing?
blogs.reuters.com 4/25/2009 — It's a good question: after all, a large part of my speech to the regional bond dealers (more of the actual speech than of the notes ) comprised me explaining that I was very wrong about a lot of this stuff. ... I've recently finished reading Gillian ...
Dizard: "Put the credit default swaps market out of its misery"
nakedcapitalism.com 12/9/2008 — As credit default swaps have come in and out of focus over the last year, I have been struck by the assumption that this product would of course continue to exist. I have trouble seeing their legitimate uses. In theory, they could allow banks to ...
So Do CDS Counterparties Post Collateral or Not?
nakedcapitalism.com 12/2/2008 — I hate it when I get contradictory information from supposedly reliable sources, which happens upon occasion when the topic is CDS. The latest Institutional Risk Analytics newsletter is again after one of its favorite objects of ire , credit ...
" Credit Swaps Top $33 Trillion, Depository Trust Says"
nakedcapitalism.com 11/5/2008 — Even though the (supposed) supervising grownups in the credit default swaps market keep making reassuring noises about the credit default swaps market, I am not entirely convinced, mainly because the picture is still somewhat murky. Witness the ...
How big are the Eastern European losses?
VoxEU.org 4/27/2009 — Raphael Auer , Simon Wehrmüller , 20 April 2009 Western bank exposures in Eastern Europe are an issue that is increasingly in policymakers’ sights. This column estimates the losses arising to the non-bank sector and government from foreign ...
CDS could be fair and simple
accruedint.blogspot.com 10/21/2008 — On Friday, Jim Cramer lamented that a fair credit-default swap clearinghouse will be difficult to implement. But I'd argue that a simplified version of CDS could be easily created and listed on existing exchanges. (Click here for the basics of how ...
CDS Too Risky for CME Trading, Key Members Say
nakedcapitalism.com 10/24/2008 — In theory, moving credit default swaps from over the counter trading to exchange trading should reduce systemic risk. Exchanges fail far less often than individual institutions, and when they do, the damage has less propensity to propagate into a ...
Credit Default Swaps ? Through The Looking Glass
wilmott.com 4/12/2009 — CDS contracts and credit derivatives are complex and powerful financial instruments that frequently have unforeseen consequences for market participants and the financial system. As former New York Federal Reserve President Gerald Corrigan told ...
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