CDS Disaster (from BosyBillups)

And once countries start going under the Sovereign CDS market will blow up too.

It will be cool when France defaults.

equity_analyst Wrote: ------------------------------------------------------- > And once countries start going under the Sovereign > CDS market will blow up too. Now that’s scary. What are CDS trading at for US Treasuries? So what is everyone’s thought on Uncle Sam going into these firms, examining their books, and forcing them to liquidate risky positions?

TJR Wrote: ------------------------------------------------------- > equity_analyst Wrote: > -------------------------------------------------- > ----- > > And once countries start going under the > Sovereign > > CDS market will blow up too. > > > Now that’s scary. What are CDS trading at for US > Treasuries? > > So what is everyone’s thought on Uncle Sam going > into these firms, examining their books, and > forcing them to liquidate risky positions? I’d arm myself and stand at the front door. That would be BS.

TJR Wrote: ------------------------------------------------------- > equity_analyst Wrote: > -------------------------------------------------- > ----- > > And once countries start going under the > Sovereign > > CDS market will blow up too. > > > Now that’s scary. What are CDS trading at for US > Treasuries? > > So what is everyone’s thought on Uncle Sam going > into these firms, examining their books, and > forcing them to liquidate risky positions? GREAT question. Last I heard they were trading at 28 bp…McDonalds is trading at 3 bp.

TJR Wrote: ------------------------------------------------------- > equity_analyst Wrote: > -------------------------------------------------- > ----- > > And once countries start going under the > Sovereign > > CDS market will blow up too. > > > Now that’s scary. What are CDS trading at for US > Treasuries? > > So what is everyone’s thought on Uncle Sam going > into these firms, examining their books, and > forcing them to liquidate risky positions? I’m not sure, but the Sovereign CDS market is not that big compared to the pie: Corporate 77% Bank 17% Sovereign 6% These numbers are a little stale, but are probably pretty close to where we are today. Who is the international lender of last resort again?

equity_analyst Wrote: ------------------------------------------------------- > Who is the > international lender of last resort again? MCD. Didn’t you see the earlier post?

Dear Equity Analyst, Enclosed you will find your new McSocial Security Card. This will replace your previous US government issued SS card. To ensure the transition to your new life as a McCitizen of the McUSA is a smooth one, we are offering you and all new McCitizen’s one free Happy Meal and a Coke. Just show your new card at the time of purchase. Enjoy! Jim Skinner President and CEO

equity_analyst Wrote: ------------------------------------------------------- > Dear Equity Analyst, > > Enclosed you will find your new McSocial Security > Card. This will replace your previous US > government issued SS card. To ensure the > transition to your new life as a McCitizen of the > McUSA is a smooth one, we are offering you and all > new McCitizen’s one free Happy Meal and a Coke. > Just show your new card at the time of purchase. > > Enjoy! > > Jim Skinner > President and CEO HAHA Great post. Together we may be one McNation United Under McCain. Sounds delicious.

> > I’d arm myself and stand at the front door. That > would be BS. I don’t like having the gov’t examining private companies books either – believe me. But what should we should be done? I mean what if people start defaulting on their exposure to this CDS risk – does the gov’t bail these people out as well? Does the gov’t even have enough money to bail out one side of a bad CDS bet in, say, a default in Ford? How about increasing the tax on gains from CDS to level that would make these investments unfeasible? You could make the tax increase in staggered amount, so people wouldn’t dump these contracts all at once. I’m just spitballing here folks. I’m curious to see from others whether (1) this is a serious problem waiting to happen and (2) what should be done by the gov’t, if anything?

“How about increasing the tax on gains from CDS to level that would make these investments unfeasible?” …errrrrrrr…TJR is really pi$$ing me off.

JoeyDVivre Wrote: ------------------------------------------------------- > “How about increasing the tax on gains from CDS to > level that would make these investments > unfeasible?” > > …errrrrrrr…TJR is really pi$$ing me off. That’s not my intention, really – I actually thought that would be more palatiable that on-site examination. I think I’ll lay low before I get my a$$ handed to me by Joey.

JoeyDVivre Wrote: ------------------------------------------------------- > “How about increasing the tax on gains from CDS to > level that would make these investments > unfeasible?” > > …errrrrrrr…TJR is really pi$$ing me off. That’s not my intention, really – I actually thought that would be more palatable than an on-site examination. I think I’ll lay low before I get my a$$ handed to me by Joey.

adding to the ‘perfect storm’ scenario. Hedge funds are facing high levels of redemptions and are likely strapped for cash.

Syd_RE Wrote: ------------------------------------------------------- > adding to the ‘perfect storm’ scenario. > > Hedge funds are facing high levels of redemptions > and are likely strapped for cash. I tried making that point to people on my team as a reason to play it cool, and they looked at me like I had three heads. Hedge funds are under tremendous stress, hell, some of them are shutting down because they were too stupid to spread their assets around to more than one prime dealer. So the ones that were with LEH, are getting screwed. This is going to put considerable pressure on stocks near term and longer.

AF posters’ semtimemt is a leading indicator of economic and market conditions by about one week. A short-term short strategy may be in order.

Sentiment is about as bad as it can get in here, on the street, and on main street (and I’m included in the egregiously pessimistic crowd). I’m starting to wonder whether a short-term bounce can be expected…