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Why can't counterparty default be incorporated in the pricing? Isn't that the whole purpose of pricing corp bonds?

I agree with the axiom, but I disagree with you, Mr Black Swan... Two points: 1) Everything seems more rational in hindsight than it appears contemporaneously. 2) Maybe stock mkts behaved rationally. However, other asset classes experienced all sorts of irrational behavior. Moreover...

Yep, exactly... The irony of it all is killin' me.

Why don't you construct a CIX by using CT2 Govt and CT5 Govt? Formula for 2s5s should look something like this: YIELD[CT5 Govt] - YIELD[CT2 Govt] If you want to control where the quotes for these tickers come from, you can use PCS to specify particular sources.

Sadly, this is now woefully out of date... Moreover, their methodology is somewhat flawed as they don't include sovereigns' off-balance sheet liabilities.

Indeed... Very interesting to see debt-to-GDP during and in the aftermath of the Swedish financial crisis and to juxtapose this with the current situation in the Western economies. BTW, I only listed Sweden in the first place, because of all the talk of their exposure to the Baltics. I...

Cool, Sweden rocks... Forget I ever mentioned Sweden. I am sorry I ever cast aspersions the good Kingdom.

Come on, asus... There are more interesting candidates well ahead of the US of A in the queue. Japan, UK, Sweden, maybe... Moreover, I'd expect that the ratings agencies have been muzzled, esp in terms of rocking the boat and threatening the large sovereigns.

Right... And have you actually considered what the performance of this strategy might look like?

It's just legalese... Basically, your deposits can be withdrawn until you open a deposit account with BBVA. Once that happens, the terms of your BBVA account determine the early withdrawal policy. Of course, all this only applies if your deposit isn't used as collateral for a loan, like for...

http://www.fdic.gov/news/news/press/2009/pr09150.html Excerpt from the above: "The FDIC and BBVA Compass entered into a loss-share transaction on approximately $11 billion of Guaranty Bank's assets. BBVA Compass will share in the losses on the asset pools covered under the loss-share...

I honestly think you're being paranoid here, gastro... More likely nobody wanted Guaranty, 'cause it's big and 70% of its assets are real-estate related. I think it was a real coup that the FDIC managed to offload this steaming turd onto the unsuspecting Spaniards. Apparently, estimates of...

Nothing nice... Smaller banks and they'd cherry-pick things. They'll only do things if they think it somehow offsets some other exposure they have somewhere else. I don't know the specifics of your situation, so I don't know if we're talking about the same sort of issue.

I don't see why this is such a huge deal... I also don't see how you manage to conclude that the FDIC is not a lender of last resort. It's gonna cost them $3bn and they have to backstop some of the assets. How is that not being a lender of last resort? This is a global financial mkt. If a...

We must conclude you're not French then, T-dawg :)...

Very well... If what you suggest is true, why don't we treat his prescriptions, ideas and views the same way as opinions of other hedge fund traders and managers that never needed a bailout, like Jim Rogers, Marc Faber etc? Why is it that people keep treating NNT's views as more than a guy...

Good luck! I'm looking for same... So far haircuts of 100% and higher. Pls lemme know if you find anything.

Huh? They never faced the Russian gov't... The problem was not the Russian default (how many people do you think were really exposed to the GKOs that Russia actually failed on), but rather the resulting flight-to-quality into USTs. The problem is not cpty risk. Problem is a panic that...

1. I never said he was wrong. I only said he was unoriginal and doesn't deserve great acclaim for saying what he's saying. I also don't understand why it's silly to ask for more specific approaches to solving the 'too big to fail' issue. Again, anyone can say that 'too big to fail' is bad...

You're wrong and nel-san is right... Exchanges have daily counterparty exposure just like any other financial institution. There's nothing inherently different between an exchange facing a client on a position and a bank facing a client on an OTC trade. The proper analogy is with a...