Comments on: A top CDS trader quits the CDS market http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Mx12 http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-38334 Wed, 25 Apr 2012 17:50:34 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-38334 @MrRFox on “nailing CDS writers with a big loss”.. dude you might want to read the introduction to CDS before making your comments. CDS is supposed to pay the amount of the loss an investor suffered. asking the CDS writer to make that payment is not exactly “nailing” them with a loss that would lead CDS to disappear.. @Danny_Black – thx for the link, but it’s not “another view”. it just says that the auction went smoothly, i.e., the cheapest to deliver bonds was identified and priced without any major disruptions. this has nothing to do with this article, which (vaguely) explained why it’s only by luck that the cheapest to deliver bond had the price that allowed the CDS payments to cover investors’ losses. @Felix Salmon: it might be helpful to give a bit more background, since it appears that none of the people who commented on your article actually understood what happened. and of course, no one takes 30-60 minutes it takes to educate themselves before posting comments; sad, but not surprising.

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By: Danny_Black http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37109 Tue, 20 Mar 2012 12:05:25 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37109 for another view:

http://www.ifre.com/update-market-satisf ied-with-strong-greek-cds-auction/210069 19.article

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By: IrishInvestor http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37105 Tue, 20 Mar 2012 10:28:06 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37105 @Pietro_F – Exactly….Shiner Bock indeed…

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By: Danny_Black http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37095 Tue, 20 Mar 2012 05:38:21 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37095 Sechel, how do you hedge sov credit risk with futures?

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By: MrRFox http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37093 Tue, 20 Mar 2012 04:10:36 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37093 “European policymakers, were very happy to see the CDS market get broken — they hate CDS” (F.S.)

If this is accurate, then policymakers are even less aware than commonly suspected. The availability of CDS coverage lowers borrowing costs for weak credits, doesn’t it? Sure, politicians don’t like seeing countries rated as poor credits, but so what? They are poor credits.

“fixed-income investors, wanted to make sure that the CDS market operated relatively smoothly and that the payouts were fair” (F.S.)

And by nailing the CDS writers with a big loss, the buy-side has guaranteed that CDS coverage gets much more expensive or CDS coverage disappears. How will the buy-side respond to either of those two lovely options?

And OBTW: If CDS paperwork was so poor, why did your interviewee accept it? Did he even read and understand it before he signed-up for it? Just askin’.

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37088 Tue, 20 Mar 2012 02:13:54 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37088 You don’t need to ban CDS any more than you need to ban snake oil… now that the instrument has been fully discredited the market will evaporate all on it’s own in favor of a better tool.

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By: Sechel http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37085 Mon, 19 Mar 2012 23:31:43 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37085 We would be far better off banning CDS. That sovereign debt could be hedged via futures contracts means that there are better safer hedges out there without the problems of CDS. Seems we need to re-learn the lessons of 1907 when we banned bucket shops.

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By: Pietro_F http://blogs.reuters.com/felix-salmon/2012/03/19/a-top-cds-trader-quits-the-cds-market/comment-page-1/#comment-37063 Mon, 19 Mar 2012 17:25:18 +0000 http://blogs.reuters.com/felix-salmon/?p=12520#comment-37063 Shiner Bock!

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