CDS, Bonds and Basis Trade

The crisis has given the birth to new jargon’s and terminologies in the world of financial market, I had tried to
English: The Broker at the Verizon Centeraccumulate few of them from various sources:

  • [h]ypothecation is when a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral but is “hypothetically” controlled by the creditor, who has a right to seize possession if the borrower defaults.
In the U.S., this legal right takes the form of a lien and in the UK generally in the form of a legal charge. A simple example of a  is a mortgage, in which a borrower legally owns the home, but the bank holds a right to take possession of the property if the borrower should default. Continue reading “CDS, Bonds and Basis Trade”

How did the credit market turn into an insurance market?

imagesWell it seems like actual credit investing failed so insurance policies were invented to get rid of actual cash flow and collateral analysis.
There was no need to do any research. Just buy a default insurance policy.
The funny part is the banks created and sold default insurance policies to hedge funds and they couldn’t manage their own books. makes sense
That’s why the government needs to shut down the hedge fund Continue reading “How did the credit market turn into an insurance market?”

2012 Most read post – The JP Morgan series


Good morning last day of 2012 checking the mood of market well. This is the most news driven market we’ve had since the Greece story. You gotta be quick on your feet.

Thought of sharing the post that attained maximum readers on a day. It was May 11 2012 when the 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”. 
Continue reading “2012 Most read post – The JP Morgan series”

About – The 500th post

Never give up on something you really want. It’s difficult to wait, but more difficult to regret –images

Recalling 14th February 2008, the day when created with lots of curiosity, hopes and an aim to share every bit of finance knowledge which I may share with each one of you.

Celebrating Valentine`s day with a post on Red Herring Prospectus was not a very good idea. But, it was my spirit and love Continue reading “About – The 500th post”

CDS, Bonds Or Basis Trade :

AzYiLc_CAAAg5opThe ongoing  crisis since 2008 have given the birth to lot of new jargon’s and terminologies in the world of financial market, I had tried to accumulate few of them from various sources and then will highlight an arbitrage strategy.