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Top CDS Movers: November 3
AIG speculative mania has gripped the markets. not only was AIG stock up more than 15% on nothing really, but AIG CDS was also the biggest mover wider today, hitting 780 bps, 15 bps wider close to close. Additionally, GE, which we discussed earlier as having some pretty notable balance sheet issues, was wider by the same amount, as was yesterday's top mover Sempra. In the opposite category were Anadarko and ERP, as well as Buffett's latest stamp of approval, mentioned roughly 800 times on CNBC today, Burlington Northern, which tightened by 4 bps to 55.
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CDS correlations also breaking , CDS and gold leading the way
Does anyone know where is it possible to get CDS data, besides Bloomberg/Reuters?
i use this http://www.cmavision.com/market-data and this http://www.markit.com/cds/cds-page.html the best ones i know about ....
Thank you, a lot!
How come no one reads or comments on this type of articles. This is the most interesting indicator when it comes to actually trading or investing in a stock long term, AND it gives you a pretty good idea of the general mood concerning particular entity, whether sovereign, public or private. Well their loss. I applaud you Mr. Durden for putting this up.
EDIT: BTW, mean to ask you Tyler, where do you pull this data from, DTCC or Markit.
Can't even comment on AIG, I just scratch my head and wonder at the hidden value I must be missing. Of course if I was a investment bank fully insured by the USG, I might throw down a bet down too.
The value of the entire company is 0. Yes, of course, there are divisions f AIG which are profitable and have a great long term view, such as agricultural insurance, life insurance etc etc. But given the ridiculously large amount of the CDS contracts which STILL reside on AIGs balance shit the company is worth 0. Of course those who are gunning this stock do it as a a) a day trade where they can make a +15% b) if they are crazy enough as a 1 mths-3 mths holding stock, knowing that IF the market goes down, or if the defaults shoot up there is always someone (USG) to bail it out because the company is considered TBTF. Actually i scratch my head more than often the last couple of months, searching for a line of reasoning which would give me a sound explanation of the situation we are in right now. But no, i don't find it anywhere. So i just sit back and laugh. You should do the same, it is very therapeutic.
Fannie and Freddie still trade with wild swings too,and I can promise you, with the losses on their guarantee book, there is no way that equity has any value.
And this is after Bernanke has bailed them out by overpaying for some of their assets.
Exactly the right term "throw down a bet"
The casino rages on!!
Because most equity traders don't have the faintest idea what a cds is or how it is priced beyond "yeah, it's kinda like insurance..."
silence isn't disinterest. i suspect it is because many people are like me and know so little about the debt markets that we simply have nothing to say prior to learning more?
i enjoy that this is one of the few sites that even scratches the surface of things related to corp debt.
There is muted distrust of the information content in CDS spreads. Counterparties are pretty much challenged in an existential way; gold is putting a limit on Uncle Stupid's ability to play hero; and frankly, market pricing isn't efficient.
I believe it was Ben the Bald who used the phrase "picking up pennies in front of a streamroller". With all the moral hazard in this market, it seems apt.
Also, Tyler you should really list the beta-adjusted move.
Ie a 15bp move for a credit trading at 700 is less significant than a credit trading at 50.
Thanks for posting though - good to see some more exposure for the credit markets.
Cheecky, Perhaps the readership needs a small education with respect to what tighter or wider means as it relates to investing, trading and market mood. The guys and gals get how tighter or wider relates to their personal life. Can you bless us with a post that correlates this material? Thank you for reading.
This should start you off: http://www.investopedia.com/articles/optioninvestor/08/cds.asp
dude, don't go ape shit on me .... i just said it is strange how little reads there are under this article. nothing else. and you don't need me writing a post on how CDS work, just google CDS and read everything that is listed in the first page of the search results. thats all you need.
Baby, it's dudette to you! ;) This girl was just asking for some 411. Like Anon 119020 above, the probable reason is that we are slightly ignorant of what this information means. Lighten up rock star.
ok, i apologize ... i didn't know you are a SHE ( my apologies, i will not forget it ). Actually believe it or not the article on wiki offers a pretty good deep intro into the dark world of CDS contracts. Here is the link. The lingo is also quite easy to get a grasp on. http://en.wikipedia.org/wiki/Credit_default_swap. If you want to track the daily movements in CDS market the best is if you go http://www.markit.com/cds/cds-page.html and http://www.cmavision.com/market-data. these two sites will provide you with all the daily updated which occur in the CDS market. I hope this helps, if not, you can mail me at cheeky_bastard@hushmail.com
Kind of you to say so cheeky, i wrote most of that article :-D
really, then kudos to you ... it is an excellent article on such an arcane topic as CDS contracts.
CB knows how to get the attention of the dudettes. Kudos !! I learn from you every damn day, my man.
You could easily have explained CDS........Collossal Default Securities. But better to lay some bait.
Cheeky I sincerely enjoy your posts and therefore asked kindly if you would comment. No ape shit intended.
Hey now apes need to shit too.
I wonder if they fling it afterward? (like the chimps)
"MARK IT ZERO, DUDE"
You can also poke around their website. This is where bankers and lawyers get together to make laws that affect everyone completely without any adult supervision.
http://www.isda.org/
You can also poke around their website. This is where bankers and lawyers get together to make laws that affect everyone completely without any adult supervision.
http://www.isda.org/
janet tavakoli explains derivatives in a simple straightforward way that any layman can understand. beyond legitimate hedging, they enable entities, not only to game the system, but to commit outright fraud. you,re safer on the savannah in africa, than you are anywhere near wall st.
...mentioned roughly 800 times on CNBC today...
oh yes, this is a pearl.
This all ties together in a great big credit circle jerk where da boyz manufacture lending volume. Buffett lends to GS, GE, etc.. AIG gives the banks billions in taxpayer $ then borrows at higher rates even though they are dead. Then Buffett borrows for an LBO of BNI which includes BRK stock. If I owned BNI I would sell my BRK as soon as I got it. This shit will end badly.