davidon
Well-Known Member
Who was the advisor on here? Surprised no comments on the meltdown
Help Support VMAX Forum:
Heretic.
bernieghmac
Well-Known Member
Everyone...Let us build our bikes with Gold if we can.
Got that right!
After the suedo save from a blank check for $700,000,000,000 is laid on you and I, the next issue that should have been seen 30 years ago really hits.
No carbon energy (oil based) when there is more than enough will be here before you know it. Drill within 50 miles offshore you Demo idiots...drill until something else is feasible!!! China, Russia, and several others are doing it as we speak little more than 200 miles off the Florida coast. We're NOT!!!!
Can you say..."Partisan Paralyzed"?
Maybe someone is thinking about the $1,000,000,000,000 in debt China now holds over our heads already???
Russia, China, The Communist Party Of Venezuela, and several others are all in bed together and trying their hardest to fulfill Nikita Khrushchev's promise.
Too much of a nightmare to consider these days. Looks more and more like the NWO runs the US already!
The mortgage fiasco is just a diversion from the real problem at hand created by 5 terms of presidential idiots!
The only hope for the US is to get the Government out of our way and back to what they are supposed to do, serve the people.
Great Information Here: http://www.citizensforaffordableenergy.org/
I just fell off my soapbox :biglaugh:
Neil
bernieghmac
Well-Known Member
Greed
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Redbone
Well-Known Member
Read Gleno's posts on his view of this mess of economy that we have. I don't necessary agree with all his points, but one could theroize that private intrests have played a big part in running (controlling) our goverment from the start.
You got that right Redbone.
This video pretty much sums up my take on the current mess.
Your never going to guess who is smack dab in the middle of it all.
Mister Trickle Up Economics himself.
http://www.youtube.com/watch?v=H5tZc8oH--o
This video pretty much sums up my take on the current mess.
Your never going to guess who is smack dab in the middle of it all.
Mister Trickle Up Economics himself.
http://www.youtube.com/watch?v=H5tZc8oH--o
davidon
Well-Known Member
Witnessing the collapse of the US. I'm on a stock trader board daily and some of the pessimists there are saying there is a much bigger derivitives bubble (much much worse than the sub prime one) which is going to implode. It is too late to prevent. ..600 trillion to a quadrillion worth of toxic assets. Dollar to soon crash. I've started to stock up on supplies....I'm not usually swayed by this stuff but preparing for anything.
Might be time to dust off the reloading presses, boys! :hitsfan:
davidon
Well-Known Member
D
I have never owned a weapon but am seriously considering one..any recommedations out there??
Here is some more info on the 6900 protocols...
"This is Happening now, and nothing You can do about it.
The U.S. Treasury would declare a force majeure on debt after the Asian and European markets closed, probably at 12:30 p.m. EDT. The reason why that hour was always selected is because Asian and European markets close. It?s also the lunch hour for the markets. It?s when you?re going to have the fewest people on the floor of the exchanges. That would be the ideal time to make such an announcement.
A few seconds after that announcement was made, all United States markets, both equities debt and commodities i.e., stock, bonds, commodities, that have trading collars or permissible daily limits would all be limit-offered with pools. Limit-offered means that there are more sellers at the limit i.e., limit down, than there are buyers.
So-called ?pools? would immediately begin to form, probably a thousand contracts every few minutes. ?Limit-offered with pools? - this is trader language. Pools to sell 2,000 lots, 3,000 lots. That means, the number of sellers over and above the available buyers at the limit- offered price. That would begin to build.
By 1:00, the news would begin to sink in because it would take awhile before panic selling would arise from the public. This news is being released at lunch hour.
A lot of the American people initially would not even understand the temerity of the news. You would see professional selling first, and as that professional selling intensified over the afternoon, the SEC, the CFTC, NASDAQ, and various market regulatory authorities would begin to institute certain emergency market protocols. This would be the installation of the so-called ?declaration of fast market conditions,? for instance; the declaration of ?no more stop orders,? the declaration of ?fill at any price,? etc. in a desperate bid to maintain liquidity.
That first day, the Dow Jones Industrial Average and related indices on a percentage basis would lose about 20% of their value by the close of business that day. The real impact would come overnight when the American people found out what this was all about and when it was explained to them.
At 7:30 a.m. EDT, the Tokyo markets would open, and no price would be affixed for probably three or four hours into the session due to the avalanche of selling. Once prices were established, the government of Japan would close all of its financial markets. Europe would not even open. All European governments would close all capital exchanges the next day.
The United States would, in order to accommodate global electronic trading, attempt to open the market on the second day, which they would do, regardless of price, just to maintain some liquidity. At the end of Day Two, the Dow Jones and related indices, would have lost two thirds of their value, and prices would be set accordingly.
On Day Three, the New York Stock Exchange, the SEC and other related agencies would recommend to the United States Treasury and the Federal Reserve that all markets be closed. That would be on the morning of Day Three. Eleven a.m., the Federal Reserve would then order all domestic banks closed. All of the twelve Federal Reserve district banks would (30 minutes later) have special U.S. forces parachuted in and around them to secure whatever gold bullion reserves they had left.
Day Three, 9:00 p.m., the President of the United States would declare a state of martial law. All financial transactions would come to an end. The Treasury would act to formally de-monetize the U.S. dollar and declare it worthless."
I have never owned a weapon but am seriously considering one..any recommedations out there??
Here is some more info on the 6900 protocols...
"This is Happening now, and nothing You can do about it.
The U.S. Treasury would declare a force majeure on debt after the Asian and European markets closed, probably at 12:30 p.m. EDT. The reason why that hour was always selected is because Asian and European markets close. It?s also the lunch hour for the markets. It?s when you?re going to have the fewest people on the floor of the exchanges. That would be the ideal time to make such an announcement.
A few seconds after that announcement was made, all United States markets, both equities debt and commodities i.e., stock, bonds, commodities, that have trading collars or permissible daily limits would all be limit-offered with pools. Limit-offered means that there are more sellers at the limit i.e., limit down, than there are buyers.
So-called ?pools? would immediately begin to form, probably a thousand contracts every few minutes. ?Limit-offered with pools? - this is trader language. Pools to sell 2,000 lots, 3,000 lots. That means, the number of sellers over and above the available buyers at the limit- offered price. That would begin to build.
By 1:00, the news would begin to sink in because it would take awhile before panic selling would arise from the public. This news is being released at lunch hour.
A lot of the American people initially would not even understand the temerity of the news. You would see professional selling first, and as that professional selling intensified over the afternoon, the SEC, the CFTC, NASDAQ, and various market regulatory authorities would begin to institute certain emergency market protocols. This would be the installation of the so-called ?declaration of fast market conditions,? for instance; the declaration of ?no more stop orders,? the declaration of ?fill at any price,? etc. in a desperate bid to maintain liquidity.
That first day, the Dow Jones Industrial Average and related indices on a percentage basis would lose about 20% of their value by the close of business that day. The real impact would come overnight when the American people found out what this was all about and when it was explained to them.
At 7:30 a.m. EDT, the Tokyo markets would open, and no price would be affixed for probably three or four hours into the session due to the avalanche of selling. Once prices were established, the government of Japan would close all of its financial markets. Europe would not even open. All European governments would close all capital exchanges the next day.
The United States would, in order to accommodate global electronic trading, attempt to open the market on the second day, which they would do, regardless of price, just to maintain some liquidity. At the end of Day Two, the Dow Jones and related indices, would have lost two thirds of their value, and prices would be set accordingly.
On Day Three, the New York Stock Exchange, the SEC and other related agencies would recommend to the United States Treasury and the Federal Reserve that all markets be closed. That would be on the morning of Day Three. Eleven a.m., the Federal Reserve would then order all domestic banks closed. All of the twelve Federal Reserve district banks would (30 minutes later) have special U.S. forces parachuted in and around them to secure whatever gold bullion reserves they had left.
Day Three, 9:00 p.m., the President of the United States would declare a state of martial law. All financial transactions would come to an end. The Treasury would act to formally de-monetize the U.S. dollar and declare it worthless."
Article speaks for itself!
Subject: NY Times - 1999
Amazing foresight!! Take a gander at this while they try to lay blame for the whole meltdown.
Nine years ago - this one is priceless and worth the read - right out of New York Times
September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York
metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring. Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief
executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market. In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's. ''From the
perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped. Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Well, that's interesting, don't ya think? :ummm:
Subject: NY Times - 1999
Amazing foresight!! Take a gander at this while they try to lay blame for the whole meltdown.
Nine years ago - this one is priceless and worth the read - right out of New York Times
September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York
metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring. Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief
executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market. In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's. ''From the
perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped. Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Well, that's interesting, don't ya think? :ummm:
davidon
Well-Known Member
Message from stock board I monitor..sounds like this week could be it..FYI
"Please understand that the Fed reacts to circumstances rather than acting before potential problems happen.
If the Fed hadn't taken the rather strange action they took today by becoming OTC derivative dealers themselves this would have been the day the USA banking system imploded.
Watch Libor rates to signal the point of detonation.
An implosion of the banking system is coming, which means a bank holiday will occur.
You now must have enough cash IN HAND to last a month or two.
If you have not distanced yourself from financial agents then you have a financial death wish.
If you have NOT made absolutely sure that your custodian account is a real custodial- ship you are probably in for a surprise.
I took a call yesterday from a mature lady who told me she feels her money market fund that is only in Treasuries will not pay her out. They did tell her they intend to in seven days. I asked her to call me back in eight days. How does she know that this money market fund is not in OTC derivatives based on the movement of Treasuries?
If you can retire from your retirement program at some reasonable discount do it NOW.
This is it and it is NOW. Gold is the currency of choice. The US dollar rally has NO fundamental legs.
Why are so many of you sitting there like a deer caught in the headlights? Protect yourself and do it TODAY!
"Please understand that the Fed reacts to circumstances rather than acting before potential problems happen.
If the Fed hadn't taken the rather strange action they took today by becoming OTC derivative dealers themselves this would have been the day the USA banking system imploded.
Watch Libor rates to signal the point of detonation.
An implosion of the banking system is coming, which means a bank holiday will occur.
You now must have enough cash IN HAND to last a month or two.
If you have not distanced yourself from financial agents then you have a financial death wish.
If you have NOT made absolutely sure that your custodian account is a real custodial- ship you are probably in for a surprise.
I took a call yesterday from a mature lady who told me she feels her money market fund that is only in Treasuries will not pay her out. They did tell her they intend to in seven days. I asked her to call me back in eight days. How does she know that this money market fund is not in OTC derivatives based on the movement of Treasuries?
If you can retire from your retirement program at some reasonable discount do it NOW.
This is it and it is NOW. Gold is the currency of choice. The US dollar rally has NO fundamental legs.
Why are so many of you sitting there like a deer caught in the headlights? Protect yourself and do it TODAY!
bernieghmac
Well-Known Member
Re: The milk is goin' sour quick
Right on target.. i'm on board of this ship..milk is spoilin' very quick... But wait...America lives on CREDIT uh oh....
Right on target.. i'm on board of this ship..milk is spoilin' very quick... But wait...America lives on CREDIT uh oh....
bernieghmac
Well-Known Member
DEAF EARS ??????:ummm:
"THE NILE" .... is not just a river :bang head:
"THE NILE" .... is not just a river :bang head:
Thursday is D-Day
Forget the stock market gyrations. Forget Bernanke and Paulson's ineffective, unconstitutional schemes.
Thursday's auction for Lehman's credit default swaps (CDS) is much more important.
Why?
Well, if banks are reassured by the CDS auction, it could do more to free up frozen capital than all of the Fed and Treasury's ill-conceived plans put together.
As Bill Gross, head of $721 billion dollar fund Pimco, says:
For a rough, back-of-the-envelope calculation, let's split it down the middle and call it 95% of $500 billion, which means that the issuers of Freddie and Fannie CDS will only have to pay out about 5 cents on the dollars, or about $25 billion total. That's a lot of money, but not catastrophic.
On the other hand, "investors who wrote protection on a Lehman default will have to pay out between 81 and 85 cents on the dollar."
No one has disclosed how many billions of dollars in Lehman CDSs are out there. And no one knows the exact payout amount which will be determined at Thursday's auction.
But it is known that "Lehman was one of the 10 largest parties participating in credit default swaps, the New York Times reports. The company?s most recent quarterly filing said it bought and sold $729 billion in derivatives with a fair net value of $16.6 billion." And a lot of people bought CDS betting on Lehman's failure in September.
D-Day
So Thursday is D-Day, where "D" is for "derivatives".
If there are a lot of Lehman CDS out there, and if the auction price comes in high, it could greatly exacerbate the global economic crisis no matter what Bernanke and Paulson do. On the other hand, if there aren't that many CDS out there, or if the price comes in lower than people expect, it would be a huge sign of stability in the CDS market that could reassure financial institutions and investors worldwide, which could "free up liquidity" and help avert a depression (no matter what Bernanke and Paulson do).
Washington Mutual's CDS auction is October 23rd, and we might not have a final answer on how big the CDS crisis is until then.
Forget the stock market gyrations. Forget Bernanke and Paulson's ineffective, unconstitutional schemes.
Thursday's auction for Lehman's credit default swaps (CDS) is much more important.
Why?
Well, if banks are reassured by the CDS auction, it could do more to free up frozen capital than all of the Fed and Treasury's ill-conceived plans put together.
As Bill Gross, head of $721 billion dollar fund Pimco, says:
Credit markets are based on trust and when there is no trust, markets can freeze up . . . . Imagine yourself at the drive-thru ordering a Big Mac. At one window you order and pay, at the other ? 20 feet ahead ? you pick up your lunch. What if you thought that after paying at the first window, your 1000 calorie sandwich might not be waiting for you a few seconds later. You might not pay; business as usual might not take place. That is what is happening in the credit markets. They are frozen in ?McFear.? After the failure of Lehman Brothers ? an investment bank which took orders at one window, and promised to pay at another for trillions of dollars of those CDS, swaps, and other derivative ?sandwiches? ? institutional investors said that they?d prefer to stay at home and have peanut butter instead of risking their money ordering a Big Mac. And so their money goes into that figurative mattress instead of the register at McDonald?s, people are laid off, profits go down, bank loans become less available, our economic center cannot hold.
An auction occurred today to determine the value of Freddie and Fannie's CDS. While there were approximately $500 billion in CDS written against Freddie and Fannie, those who issued CDS will be repaid between 91.5 percent and 99.9 percent of protection they sold. In other words, the issuers of such CDS will only have to pay out between .1 and 8.5 cents on the dollar.For a rough, back-of-the-envelope calculation, let's split it down the middle and call it 95% of $500 billion, which means that the issuers of Freddie and Fannie CDS will only have to pay out about 5 cents on the dollars, or about $25 billion total. That's a lot of money, but not catastrophic.
On the other hand, "investors who wrote protection on a Lehman default will have to pay out between 81 and 85 cents on the dollar."
No one has disclosed how many billions of dollars in Lehman CDSs are out there. And no one knows the exact payout amount which will be determined at Thursday's auction.
But it is known that "Lehman was one of the 10 largest parties participating in credit default swaps, the New York Times reports. The company?s most recent quarterly filing said it bought and sold $729 billion in derivatives with a fair net value of $16.6 billion." And a lot of people bought CDS betting on Lehman's failure in September.
D-Day
So Thursday is D-Day, where "D" is for "derivatives".
If there are a lot of Lehman CDS out there, and if the auction price comes in high, it could greatly exacerbate the global economic crisis no matter what Bernanke and Paulson do. On the other hand, if there aren't that many CDS out there, or if the price comes in lower than people expect, it would be a huge sign of stability in the CDS market that could reassure financial institutions and investors worldwide, which could "free up liquidity" and help avert a depression (no matter what Bernanke and Paulson do).
Washington Mutual's CDS auction is October 23rd, and we might not have a final answer on how big the CDS crisis is until then.
davidon
Well-Known Member
Glen
I did'nt post that article but the same guy I've been quoting also put up that article as well.
D
I did'nt post that article but the same guy I've been quoting also put up that article as well.
D
davidon
Well-Known Member
New Wall Street terms
New Wall Street terms
CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake
himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the
wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market
keeps crashing.
BROKER -- What my broker has made me.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally
between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per
share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @
$240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a
nuthouse.
PROFIT -- An archaic word no longer in use.
New Wall Street terms
CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake
himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the
wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market
keeps crashing.
BROKER -- What my broker has made me.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally
between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per
share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @
$240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a
nuthouse.
PROFIT -- An archaic word no longer in use.
bernieghmac
Well-Known Member
LOL!!! Great stuff !! Thanks so much guys for breaking it down into terms that simple people like myself can understand :clapping:
I've always hated Banks.
I've always hated Banks.
davidon
Well-Known Member
Timeline for the Epic Lehman CDS Auction Tomorrow (actually today 10/10)
Here is (according to Reuters) the timeline for what will be an epic CDS auction tomorrow related to the Lehman bankruptcy. There are huge losses to go around, confusion about counter-parties, and I expect a host of releases tomorrow afternoon as people disclose their newfound liabilities.
9:45 a.m.-10 a.m. Auction participants will submit bids and offers for the debt backing the credit default swaps, which will be used to determine the initial recovery rate of the swaps.
10:30 a.m. Auction administrators Creditex and Markit will publish the initial recovery price and the open interest for the contracts will be published. The open interest reflects the amount of bids and offers that have been made, and will show if there are more buyers than sellers, or vice versa.
12:45 p.m. -1 p.m. Participating dealers will submit limit orders for the debt on behalf of themselves and their clients to fill the open interest
2 p.m. The final price of the auction will be published.
Most people expect prices in the 12-to-13 cents on the dollar, leading to payouts in the $400-billion range.
Comments (4)
Sort by: Date Rating Last Activity
Thread active 2 hours agoCollapse thread
Paul Kedrosky?76p The Freddie/Fannie auction was this past Monday, and it went relatively cleanly, with high recovery rates on the debt, and only one lawsuit that I've seen. Lehman is a different issue altogether.
POST REPLY? 2 hours ago
Thread active 1 hour agoCollapse thread
0
Ted Murphy So they are selling 3.2T in Credit Default Swaps, representing 5.8% of a 55T global market in CDS. They are expecting to take a 87.5% hit, recouping $400B and losing 2.8T. This translates into further losses of $48.1T on the rest of the $55T. It seems so awful that it can't be true.
POST REPLY? 7 hours ago
+1
khyron4eva?22p Maybe this is stupid question and oversimplification, but I have to wonder why CDS contracts aren't simply being unwound? Now, we're all familiar with the backlog in these things that NYFED (and Geithner in particular) was was working to clear out -- paper records, bad novation records, etc. All that good stuff from 2005. So the question is, how accurate is $62T notional at this point in time. How many of those contracts are being unwound daily? Probably not huge (or even statistically significant) amounts, admittedly, but I have to imagine some players are just getting out, if they can.
That said, you don't just unwind $50T+ of CDS contracts in a month, especially on a bankrupt reference entity.
Just thinking aloud.
The losses expected from this auction will absolutely wreck many banks tomorrow...some don't even know it yet, but they're dead men walking...
Here is (according to Reuters) the timeline for what will be an epic CDS auction tomorrow related to the Lehman bankruptcy. There are huge losses to go around, confusion about counter-parties, and I expect a host of releases tomorrow afternoon as people disclose their newfound liabilities.
9:45 a.m.-10 a.m. Auction participants will submit bids and offers for the debt backing the credit default swaps, which will be used to determine the initial recovery rate of the swaps.
10:30 a.m. Auction administrators Creditex and Markit will publish the initial recovery price and the open interest for the contracts will be published. The open interest reflects the amount of bids and offers that have been made, and will show if there are more buyers than sellers, or vice versa.
12:45 p.m. -1 p.m. Participating dealers will submit limit orders for the debt on behalf of themselves and their clients to fill the open interest
2 p.m. The final price of the auction will be published.
Most people expect prices in the 12-to-13 cents on the dollar, leading to payouts in the $400-billion range.
Comments (4)
Sort by: Date Rating Last Activity
Thread active 2 hours agoCollapse thread
Paul Kedrosky?76p The Freddie/Fannie auction was this past Monday, and it went relatively cleanly, with high recovery rates on the debt, and only one lawsuit that I've seen. Lehman is a different issue altogether.
POST REPLY? 2 hours ago
Thread active 1 hour agoCollapse thread
0
Ted Murphy So they are selling 3.2T in Credit Default Swaps, representing 5.8% of a 55T global market in CDS. They are expecting to take a 87.5% hit, recouping $400B and losing 2.8T. This translates into further losses of $48.1T on the rest of the $55T. It seems so awful that it can't be true.
POST REPLY? 7 hours ago
+1
khyron4eva?22p Maybe this is stupid question and oversimplification, but I have to wonder why CDS contracts aren't simply being unwound? Now, we're all familiar with the backlog in these things that NYFED (and Geithner in particular) was was working to clear out -- paper records, bad novation records, etc. All that good stuff from 2005. So the question is, how accurate is $62T notional at this point in time. How many of those contracts are being unwound daily? Probably not huge (or even statistically significant) amounts, admittedly, but I have to imagine some players are just getting out, if they can.
That said, you don't just unwind $50T+ of CDS contracts in a month, especially on a bankrupt reference entity.
Just thinking aloud.
The losses expected from this auction will absolutely wreck many banks tomorrow...some don't even know it yet, but they're dead men walking...
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