credit default swaps

This chart from Credit Market Analysis shows the sovereign bonds which had the greatest percentage increase in their default probability over a 5-year horizon.

Given Greek sentiment, in all likelihood, a referendum vote for the bailout agreement will fail. The question is “what then?” I would anticipate that, at a minimum, an an actual default which triggers credit default swaps with higher…

The big question–apart from how many investors they will get to go along with this, given that they couldn’t reach their target of 90% investor participation when the write-down was only going to be 21%–is whether this will trigger a CDS…

CDS buyers hate it, as do holders of Italian, Spanish, Irish, and Belgian bonds. Portuguese bond holders are just fine. There was no reaction in Austria, Germany and France.

I see this deal as a quid pro quo for the banks getting recaps in exchange for writedowns. Because it is a negotiated agreement of a sort of payment in kind, it isn't really clear if the banks are being made whole (as compared to a…

The French paper L’Express live-blogged the event and I just wanted to fill you in on the critical passage right at the outset of the interview that everyone has been talking about regarding the Greek default, the CDS and the euro. My…

Markets rallied strongly in response to the European developments. Yet it is an exaggeration to think that risk appetites returned as the whole month of October has seen equities, emerging markets, commodities and foreign currencies trend…

What happens when you get a default that equates to a 50% loss for most investors without triggering default insurance? Massively negative unintended consequences.

Here are a few charts from the credit default swaps market based on 5-year CDS. Here’s what I see.

The problems Italy faces may have deeper roots than simply the current prime minister. It is not clear that the opposition offers a significantly different agenda rather than different personalities. ECB bond buying of Italian debt…