Image from NY Times article, Arcane Market Is Next to Face Big Credit Test, an article which is getting huge circulation among financial blogs as it is makes public to the world at large what the financial blogs have been saying for months, that the coming debt crunch could make subprime seem small.
Few Americans have [...]
Posts Tagged ‘CDS’
Leveraged debt and the current debt crisis
Credit default swap losses may reach $250 billion
Bill Gross of giant bond management company PIMCO says losses on credit default swaps could reach $250 billion based on historical default rates.
To put that number in perspective, many Street estimates ascribe similar losses to subprime mortgages, a derivative category substantially distinct from CDS insurance.
With CDS, a bond issuer sells risk to the buyer who [...]
