Credit Default Swaps are potentially pointless

[DRumsfeld2000]

Listen to this interview regarding the International Swaps and Derivatives Association.

http://www.youtube.com/watch?v=9802N...layer_embedded

[globaleconomicollaps]

Re: Credit Default Swaps are potentially pointless

I'm trying to determine if there is some new information here. Not seeing it right now.
Summary: " If Greece goes down CDSs will not pay off, therefore major holders of CDSs will go bankrupt."

[DRumsfeld2000]

Re: Credit Default Swaps are potentially pointless

You might have known all of this, but I was unaware that there is apparently no definition of 'default' which means that there is no automatic payout on the CDS. Also, what is the makeup of the 'board' on the ISDA defining what a 'default' is? If Sinclaire is right on his assertions, surely this has huge implications, perhaps especially for European banks as I have read that they are supposed to have insured many investments using CDSs. How far does this go throughout the whole fianancial system?

[makimanos]

Re: Credit Default Swaps are potentially pointless

Since big banks own the governments there is always a solution.
The 1% has an exit. War.

[Guest]

Re: Credit Default Swaps are potentially pointless

Jim Sinclair is very old school. I suspect he is a very good trader but his knowledge of CDS is very poor. This interview had no new information, is inaccurate and only served to feed the gold bug frenzy. Having said that, his trading calls I quite like.

[oddlots]

Re: Credit Default Swaps are potentially pointless

FWIW I've seem commentators such as Felix Salmon bring up the idea of a no-default default without any apparent panic concern at all which makes me wonder what he knows.

[c1ue]

Re: Credit Default Swaps are potentially pointless

Credit Default Swaps are just another crap way to lie - the latest in a long, long line of financial 'innovations'.

What they really represent is the packaging of some salesman's bulls**t so that his client (sucker) feels better.

And like all such constructs, only last as long as not too many of them are actually activated.

[ProdigyofZen]

Re: Credit Default Swaps are potentially pointless

Well, I know that credit derivatives are many times the size of the world economy so its pretty big

[dcarrigg]

Re: Credit Default Swaps are potentially pointless

Credit Default Swaps are just another crap way to lie - the latest in a long, long line of financial 'innovations'.

What they really represent is the packaging of some salesman's bulls**t so that his client (sucker) feels better.

And like all such constructs, only last as long as not too many of them are actually activated.

+1

Until there's an innovation in algebra, compound interest is just compound interest. Any "innovation" put on by the financial industry, therefore, is automatically a scam by definition.