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By convention, the recovery rate is assumed to be 40% for senior and 20% for subordinated for standard CDS contracts such as this one.

Right, so this is SR CDS, which assumes a 40% recovery rate by convention. This implies a 5Y risk-neutral default probability of arnd 45%, which is roughly 6% higher on the day, assuming I did all the arithmetic correctly.

I can't easily see the live yields, but 5y CDS appears to be at 721bps, up arnd 141.5 points on the day.

Well, it's Japan... Rightly or wrongly, they can, and will, do a lot of things that people in the West can't imagine or understand.

The BoJ, contrary to your initial statement, has been buying ETFs and J-REITs for a long time now. They first purchased equities from commercial banks back in 2002 (although this was not deemed to be part of QE then).

Nah, it's fine, I'll be quiet for now...

Ouch...

Ouch...

HALLELUJAH!

Whatever, man... I have absolutely no clue what you're saying, so, for that reason, I'm out.

What? I am missing the funny, sorry...

Are you asking me?

Well, I'll be damned... Looky what interesting things you'd find in that article: "First of all, the portfolio loses money with dynamic hedging because it has negative gamma—something the dynamic hedging cannot change. ... The fact that the portfolio has negative gamma means that the dealer is...

Huh? How, pray tell, can I backpedal, if I am quoting my original posts? Indeed, the whole point is that I repeatedly mentioned risks and uncertainties in 2014 and am not bringing these things up now, contrary to your claim. So you can certainly accuse me of being too optimistic and of...

Firstly, I take exception to this: "... certainly glad to hear you are catching up to the rest of us that Abenomics ... could potentially fail and ... that you've changed your tune to your original hypothesis". This is what I said in one of my old posts (Aug 2014): "Obviously, I am not...

Well, it's certainly possible that I am not as educated in macro econ as you thought. On the other hand, many other interpretations are also possible. As to Abenomics being a success, like I mentioned previously, I am not as optimistic as I used to be, which means that I don't think I would...

1. Yes, correct. "Dynamic hedging" is commonly used to refer to delta hedging. 2. Simplistically, if, over the lifetime of the option, the volatility that you actually realized through delta hedging is lower (higher) than the implied volatility that you "sold", you're going to make (lose)...

All rightie then, this is where I give up, as well... This is, like, "hardcore retard" mode right here.

cvds, you need to let this one go... The OP appears to have gone "full retard". botpro, you need to stop. You've got several people telling you something. At the very least, it would be wise to pause and consider the message.

Right, sorry, let me respond with a little more detail, so that maybe you understand... Firstly, pls make up your mind whether you're a mkt maker/bank or something else. There is obviously a big difference. Secondly, if you actually think a tiny bit about what I said, you should conclude that...