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Tag Archive: COLLATERAL DEBT OBLIGATION


2012 Mid Year World economy towards the path of Bailouts & Bankruptcies

Filed under: Economies — 1 Comment
June 30, 2012

Well its the last day of the month and the world economy standing in the mid of year 2012. Lets try to pull the events by connecting the dots and see where the world is :
1) After months weeks years of posturing and denial Spain and Cyprus formally requested aid from Europe bailout funds. More so they have officially confessed to their insolvency and the insolvency of their banking system.
Spain 10 year bond yield breached the worst level and it touched the 7% in return many od the Spain bank ratings got junk by Moodys

2) Over in the US, the city of Stockton, California filed for bankruptcy this week… View full article »

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Greece crisis contagion on the cards

Filed under: Financial Crisis — 1 Comment
May 16, 2012

Well it is official the political party leaders in Greece failed to reach on the agreement and the re-election is on the cards. The jeopardy conditions calls for the lenders withdrawing $898 million from greek banks. What will happen if Greek exits Euro ? Who will pay their debt in-case if they exit Euro and the future of Euro lot of dilemma needs to be addressed.

The ripple effect of the above is that the parties who oppose the austerity measures upon which Greece’s bailout is conditional, such as Syriza, will gain support in new elections. View full article »

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JP Morgan Series :

Filed under: Financial Crisis — 1 Comment
May 14, 2012

Picking up from the CDX.NA.IG indices are composed of 125 North American corporate credits that are investment grade when the index begins trading understanding JP Morgan loss. As derivative’s are zero sum game so if JP Morgan lost $2 billion from April 2012, than who made a $2 billion profit in the same time, well I don’t know.May be some unidentified hedge funds apparently. It was like once the sharks smelled blood in the water, they started betting against the whale, making his losses much bigger. The huge size that traders were complaining about

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Understanding JP Morgan Loss

Filed under: Financial Crisis — 6 Comments
May 12, 2012

Leading financial media broke the story on thursday night about the $2bn trading loss on credit derivatives trading, which chief executive Jamie Dimon blamed on errors,sloppiness and bad judgement” and warned “could get worse”.

Well the Centre of loss in non other than bank’s chief investment office (CIO).It is responsible for managing and offsetting the vast amounts of “credit exposure” the bank incurs through its daily View full article »

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Leverage is good or bad

Filed under: Economies, Financial Crisis — 1 Comment
April 25, 2012

As I have been continuously posting on the Credit derivatives these days thought of sharing a post that  I did early in 2008 when the face of Investment banking completely changed after sub-prime crisis. 

There was an era  when Investment banking (IB) was on the role … hefty packages, luxurious life, dream job for a financial student were some of the features of IB. Over the years evolved as a very big concept coined by the US, In India we use to call that as a merchant banking .

Goldman Sachs, Bear stern, Morgan Stanly, Lehman Brothers and Merrill Lynch were the 5 icons which use to shine at the wall street over the period of time. View full article »

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More on OTC derivatives reform :

Filed under: Economies, Financial Crisis — 2 Comments
April 24, 2012

As I am trying to communicate from my last post that the market for OTC derivatives is mammoth in size. I have tried to put my views in my past articles over OTC.Derivatives Central Clearning & Dodd – Frank .Central Clearning Of derivatives & Dodd – Frank continues… , Credit derivatives Cat bonds & Cat Swaps ,OTC derivative series CDS, Bonds and Basis Trade

I got the opportunity to read one of the recent paper on Reforming the OTC derivatives market by William C Dudley .

Dudley believes the pre-crisis OTC derivatives market needed reform. Let’e examine his case. View full article »

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Greece Again “Default already and get it over with. God this is tiring.”

Filed under: Economies, Financial Crisis — 4 Comments
March 7, 2012

To start with yesterday western markets tumbled and today morning Asia trading in the red. The ghost of greek debt default could wreak $1-trillion damage on euro-zone.

Stocks down, gold down, oil down, copper down, EU periphery debt down. The day is shaping up to be the worst for risk thus far in 2012.

The deal is turning on the screws, my last post on where ISDA Under criticism on GREECE indicates that Investors are under pressure to sign up to the deal, which will see them lose almost three-quarters of the value of their bonds.

Greece wants creditors who hold 90% or more of the debt to agree. If take-up falls below that but exceeds 75%, it is expected to force losses on those who do not willingly sign up, known as collective action clauses (CACs). View full article »

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ISDA Under criticism on GREECE

Filed under: Economies, Financial Crisis, Financial media articles — 7 Comments
March 2, 2012

International Swaps and Derivatives Association is the body corporate to make over the counter (OTC) derivatives market safe and efficient.

It has 815 members from 58 countries including global, international and regional banks, asset managers, energy and commodities firms, government and supranational entities, insurers and diversified financial institutions, corporations, law firms, exchanges, clearinghouse and other service providers.

The Key areas of ISDA are
* Reducing counterparty risk
* Increasing the Transparency
* Improve the OTC operational infrastructure.

The details are provided on the ISDA Brochure

Recently ISDA came under criticism on its decision that based on current evidence the Greek bailout would not prompt payments on the (CDS)credit default swaps. View full article »

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Europe is Freezing !! Defrost needed for Greece soon

Filed under: Economies, Financial Crisis — 1 Comment
February 8, 2012

Yesterday Merkel quoted all EURO countries must contribute to fight the crisis, seems too bad all but Germany are broke, she also said that European nations will need to cede more power to EU and back to feudalism.Now the ball is in the Greece court.

A new proposal by ECB was that, ECB would tender its bonds in to Greek debt exchange and would help greek to achieve to save approx 11 billion Euros. The condition holds true is that ECB has approx 50 billion euro of Greek bonds, so that will allow Greece to have 39 billion euro of debt instead of 50 billion euro, saving approximately 11 billion euros.
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Greece should take the Icelandic way :-

Filed under: Economies, Financial Crisis — Leave a comment
February 1, 2012

As Greece has called for the crisis meeting because the Debt talks are not working their way since months, going through the possibilities, just wondering why Greece should not adopt the Iceland way.

Not only would it be better for Greece, it would be better for Greece’s creditors.

1. It would be a credit default, so CDS would have to pay out. Much better for creditors than a 70% haircut where default insurance is void.

2. Greece would regain fiscal sovereignty.There would be plenty of pain, but less than the forced austerity Germany suggested.

3. The IMF would not be securing against Greece’s assets. This is a win for the Greek people, as the current bailouts don’t help them.

I could go on and on… but no need. Iceland showed the way. Greece need only follow.

Or there is one radical ways to follow on with Eye bursting, bowl moving, hyenia laughing radical.

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