Merkel Provides Some Sanity To The Anti-CDS Hysteria

Tyler Durden's picture

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Anonymous's picture

Wrote a couple of days ago:"Here comes a boxing match of Merkel vs GS",and if I have to put my money on somebody,I would put it on GS. Second or third round in TKO..

Missing_Link's picture


Hephasteus's picture

Ya don't ban CDS. Just let whoever has to pay go bankrupt instead of getting a bailout. Wasn't that how insurance worked years ago. Sell a bunch of insurance for super cheap. Spend the money when disaster strikes fold up and leave town.

Anonymous's picture

Greece is to blame for Greece's woes. Period. They put themselves in the position which others can speculate on their demise.

We are now moving from nearly all individuals being victims, to sovereign countries being victims.

BlackBeard's picture

I'd stick my foot in her mouth.  Little sausage cutie with princess leia braids.

Anonymous's picture

Maybe you are thinking of Yulia Tymoshenko? Merkel is not a cutie and does not have braids.



Anonymous's picture

An expert can correct me, but couldn't collateral in any particular currency be converted to Gold? If I ran a hedge fund and bought a CDS from on my UK bonds I just bought, couldn't I demand that the collateral (say in Euros) be put in a separate account. Then use that account, and my UK bonds (one or the other is a pay-out) as collateral to buy gold? Couldn't I also have an agreement with the third party holding the collateral account to convert it into Gold?

It would be more convoluted than just having JPM deposit some Gold in an account, but still possible to achieve indirectly.

fuu's picture

Janet is that you?

Anonymous's picture

Well,may be,just may be JPM will agree to such a transactionthinking that the time of reckoning will never come. Afterall,didn't AIG think that too?. While agreed,Dimon will not fall in a trap that he and others wrote,but greed might do more. And come to think about it,Hedgies might just form a "group thinking"that fiat currencies are no longer good settlement on those CDSs when actually you are betting against their soverign backers.

knukles's picture

My mom got hysterical once.  Didn't help.

Anonymous's picture

What's wrong with banning Naked CDS - doesn't make sense to buy insurance where you don't have an insurable interest ... Keeps the positives of CDS (risk mitigation, etc.) while clamping down on the more speculative element -- no longer can Ackman & co short stock, buy CDS and let the reverse feedback loop earn him great sums of money.

trav7777's picture

Translation:  We hedged our Greek exposure with AIG CDSs

assumptionblindness's picture

Merkel's statements aren't surprising at all.  Her telephone was probably ringing off-the-hook over the weekend with various German bank CEOs calling to say; "Shut up!  shut up!  shut up!  Are you stupid?!  Don't you know that our capital ratios are supported by the CDS market?!  If the CDS market is banned then we are all Fuc-d!   Get it!  Got it?  Good...  You know what to do."

velobabe's picture
Tavakoli: Washington Must Ban U.S. Credit Derivatives as Traders Demand Gold

Stacy Summary:  Wow, great piece by Janet Tavakoli.  We definitely need to get her on the show to discuss.

Mar 8, 2010 at 5:08 pm

Got Gold?

New currencies being created in the mid-east will have a gold component.

Chinese, Indians, Russians. . . . all increasing gold positions.

Rich hedge funds like P.J. Jones, Soros, and John Paulson dramatically increasing gold position.

also, I have some inside info. re: Janet T. She is working on a new story about the gold ETF, GLD that should be out soon (if it is not already out).

trav7777's picture

Notice how as soon as Gold appears to have ANY value whatsoever, Douchinger says BAN ALL SOV CDSs!!!!!!!

God, why the fk would traders demand payment in something WORTHLESS as Douchinger says gold is?  He should be ALL FOR IT.  Heck, man, who wouldn't want traders to get compensated in something so useless and without intrinsic value as gold, eh, KD?

MagicHandPuppet's picture

+1... don't know why KD is constantly hating on gold.  Makes me suspicious... but, nothing new.  I'm always suspicious!

Mr Lennon Hendrix's picture

V, now you are running game!  Bravo!  Tavakoli is one of the best!

velobabe's picture

jimi she should be the woman of the year, got game over all of them, warren, clinton. wow did you listen to this 60 interview on C-Span. she is beautiful, a chemical engineer degree. WOW i am in love, she wears pearls. married an iranian for 4 yours but is divorce. she comments on

Mar 8, 2010 at 6:53 pm

@Stacey, Max

I just got a reply from David McWilliams saying he would go on the show!

So I recommend that you contact him through his website at :

Hope this helps!

Pissed off Irish man!

P.S I’ve a case against my previous employers (public sector) in two weeks to get my job back under the fixed-term workers act 2003….wish me luck guys!

chet's picture

Just shrink the CDS market down and regulate it like insurance.  Require transparency.  Ban naked gambling with these things.

We are masters at acting like straightforward solutions are hopelessly convoluted and inachievable.  "Oh, what are we to do?"  Why not listen to the many many wise people telling you precisely what to do?  I just summarized it in less than 100 words.

I don't think most American people have quite woken up to the fact that the modern Congress can't/won't do anything to fix national problems.  The institution simply no longer works.  They aren't going to fix any of this.  They aren't going to re-regulate Wall Street.  Five years from now, every single one of the problems with the financial sector will still be there, completely unaddressed.

Lots of people are starting to realize that Congress simply doesn't work, but not enough.  And what's more, once you realize it, what the hell can you do?  Elect a different set of people to go sit around in a an institution that's fundamentally broken?

Anonymous's picture

Very, very disturbing news: I sold most of my gold last year to purchase some property that never materialized.

Hey, this is what true gold-bugs have been preaching for like... ever. Things are heating up, and fiat paper will burn baby burn long before gold melts.

walküre's picture

Confusion reigns.

Who here can honestly say they completely and totally understand who is owed what and what insurance is paying which default out of which pocket?

Chickens running with their heads cut off coming to mind..

If you're ignorant to believe that this game of financial trickery can go much longer, all the power of ignorant bliss to you.

If you're like me and feeling just a little bit uneasy about the massive propaganda and the confusion.. make the exit before everyone else catches on.

When the world knows what is being played, it will be too late.

Mass hysteria, pandemonium, chaos and anarchy are not fun to watch. Not even from the sidelines.

Anonymous's picture

There won't be any sidelines for this one... well... maybe Madagascar or Bali or some place.

dnarby's picture
"Merkel Provides Some Sanity To The Anti-CDS Hysteria"

Uh...  WTF, Tyler?!


They could absolutely fucking ban them if they fucking wanted to!

But if they are not going to ban them, then they need to fucking regulate them like they do INSURANCE, which is what CDS are supposed to be!!!

Denninger lays it out here!


trav7777's picture

Douchinger is utterly full of shit.

Someone in Iran or Dubai or Lichtenstein could open a CDS bourse even if these things WERE on an exchange (which they're not).  They're OTC contracts subject to the laws of the nation they were originated in.

If they have knock-on effects for people netting out their exposure, like going short the national sovereign issue, then who gives a shit?  Sovereigns have been FEEDING the CDS beast for a decade.

Anonymous's picture


Is that you?

dnarby's picture

And pray tell WTF that has to do with regulating CDS's like insurance (e.g. requiring adequate collateral)?!

Looks to me that if you want to find a douch, you should look in the mirror.

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