Credit Default Swaps

The Beginning Of The End For Glencore, And How To Trade It

Update: even the rating agencies finally noticed - S&P: GLENCORE TO BBB/NEGATIVE FROM BBB/STABLE

Earlier today, Glencore stock plunged to a new all time low, after crashing nearly 20% in the past two days as investors with rose-colored glasses finally appreciate the dire reality facing the global miner. However, the best way to trade the beginning of the end for Glencore is not using stock at all.

Which Countries Have The Highest Default Risk: A Global CDS Heatmap

Aside from the socialist utopias of Greece and Venezuela, who else is on the default chopping block? The CDS heatmap below lays out all the countries which according to the market, are most likely to tell their creditors the money is gone... it's all gone.

Disorderly Collapse - The Endgame Of The Fed's Artificial Suppression Of Defaults

Nobody apparently learned much from the whole bubble-bust affair as banks and financial firms are at it again, this time in corporate debt. The artificial suppression of default, in no small part to perceptions of those bank reserves under QE (just like perceptions of balance sheet capacity pre-crisis), has turned junk debt into the vehicle of choice for yet another cycle of “reach for yield.” In the past two bubble cycles, we see how monetary policy creates the conditions for them but also in parallel for their disorderly closure. It isn’t money that the FOMC directs but rather unrealistic, to the extreme, expectations and extrapolations. Once those become encoded in financial equations, the illusion becomes real supply.

Wall Street's Next Bonanza: Subprime Marriage-Backed Securities

If marriage insurance sales take off, it's only a matter of time before Wall Street repackages it and sells it to investors via subprime marriage-backed securities. A boom in marriage speculation would ensue. Did you see your neighbor with his mistress last night? Buy some MBS credit default swaps on him and tell his wife what you saw.

Collapsing CDS Market Will Lead To Global Bond Market Margin Call

As we previously noted, liquidity is there when you don't need it, and it promptly disappears once it is in demand. Consider it "cocktease capitalism." If liquidity lasts longer than 4 hours, call the CFTC because you may be experiencing a spoof. Right now, the ultimate spoof is setting up as the credit default swap market collapses, and a global bond market margin call is just around the corner.

Crossing The Event Horizon On 50 Years Of A Financially-Engineered Black Hole

"The net effect of all that will be the disappearance of nominal wealth — it crosses an event horizon into a black hole never to be seen again. The continent discovers it is a lot poorer than it thought. Fifty years of financial engineering comes to the grief it deserves for promoting the idea that it’s possible to get something for nothing."

GoldCore's picture

If and when Greece finally defaults it will be able to place the blame squarely at the feet of the European elites. If an agreement has not been reached by Friday when the Eurogroup of Finance Ministers meet in Riga it is quite likely that Greece will default.