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 [...]
Posts Tagged ‘shadow banking system’
Credit default swap losses may reach $250 billion
Financial castles of sand
The Financial Times has a quite understandable, informative article about the collapsing shadow banking system and how it is impacting real banks and the financial world at large.
How crazy did it get?
Satyajit Das, an author and derivatives industry expert, cites an example where just $10m of real, unlevered hedge fund money supports an $850m mortgage-backed [...]
