Tag: CDS

Greece Won’t Kill CDS, Dodd-Frank Will

(also posted on TabbFORUM.com) Greece is defaulting on its loans. OK, technically, that’s not true. The official version is that Greece’s creditors have agreed to a “voluntary” haircut of 50 percent on the outstanding debt. The word voluntary is key. Because the haircut is technically voluntary, a credit event will not be triggered, which means […]

ICE Clear to Offer First Clearing for Sovereign Credit Swaps (BusinessWeek)

I’ve done a lot of thinking about this over the past few months – is it feasible for a clearinghouse to clearing CDS of its members (say, CDS on GS debt) or of sovereign  debt, especially debt of the country where the CCP sits (e.g. ICE Clear clearing CDS on US debt).  Too much wrong way […]

My conversation with Benchmark Solution's CEO Jim Toffey

Jim Toffey, one of the co-founders of Tradeweb and general e-trading pioneer, is heading up a pretty fascinating new venture. Using ultra sophisticated analytics Benchmark has created a market data service that streams corporate bond and single name CDS prices every 10 seconds even when the instruments haven’t traded in hours (or days or weeks). […]

Will U.S. Default? $4.8 Billion Investment Says Yes (ABC News)

This whole debt ceiling fiasco has brought CDS back into the main stream news again.  Last time that happened was – well – you remember.  My quote in this story was in response to the reporters request to “explain how credit default swaps work for the average person”.  That aside, it should go without saying […]

Three-Fifths Of OTC Derivatives Could Be Cleared, Says Citi (Dow Jones)

Citi has a new study geared towards helping its clients prepare for Dodd-Frank.  The two most interesting parts are their estimates for overall growth in IRS and CDS outstanding notional (to $435 trillion by 2013) and their estimates for how much of the OTC derivatives market will be cleared (~60%).  I’ll withhold my opinions on […]

Timing Of European Credit Default Swaps Probe Piques Interest (Wall Street Journal)

This story was posted last week, and although its a bit odd to repost the story that quoted Kevin on the Street, I thought the author Katy Burne did a great job of explaining how the providers of CDS market data do what they do. The decision to review alleged preferential treatment of certain vendors […]

Wall Street Bets on Debt That Doesn't Exist (Wall Street Journal)

Many still seem skeptical of credit default swaps (CDS), but the reality is (and always has been) that they play an important benchmarking function for the global credit markets.  That’s why when I heard that GM CDS was trading without the existing of any underlying GM bond I wasn’t at all surprised. Two things to […]

Barclays Capital Rolls Out Electronic Credit Default Swaps Trading (Wall Street Journal)

Execution and clearing mandates for OTC derivative trades are still nearly a year a way by my estimates, but the Street is already getting ready.  While Deutsche Bank and Bluemountain Capital executed CDS trades through Tradeweb and cleared via the CME and ICE, Barclays was busy rolling out its new electronic CDS trading product for […]

Reinventing the Credit Default Swap: CDS on CCP

Also posted at TabbFORUM and JLN Interest Rates. Whatever you think of credit default swaps after the financial crisis and global recession that ensued, they did have some worth: people who bought them were protected against what turned out to be real risk “credit events.” So what if we were to take their intrinsic value […]