Banks, Credit Events, And Sovereign CDS

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Wed, 10/12/2011 - 12:57 | 1766287 gojam
gojam's picture

Thanks Peter.

Thought provoking.

Wed, 10/12/2011 - 13:12 | 1766338 SuperRay
SuperRay's picture



(Hey, I know elections are BS anyway, but we need to attack in every way possible)

Copy this URL and send it to everyone you know.  It's a petition.

Wed, 10/12/2011 - 13:22 | 1766365 shaxmatist
shaxmatist's picture

You nailed it, Peter.

I believe that letting Lehman fail was the only thing they've done RIGHT.. the rest was fucked up.

Wed, 10/12/2011 - 16:06 | 1766981 Ghordius
Ghordius's picture


Save the banks or the sun will stop rising!
Save the bankers or capitalism will stop to function!

Wed, 10/12/2011 - 23:23 | 1768300 covert
covert's picture

more worthless paper


Wed, 10/12/2011 - 12:59 | 1766294 winter is coming
winter is coming's picture

Seems like a never ending rally

Wed, 10/12/2011 - 14:41 | 1766638 gojam
gojam's picture

There was this guy in the UK about 20 years ago who believed the world was going to end, he sold his house and all his possessions and he placed all the money on the world ending on a particular date at his local bookmaker who happily took the bet. (this is a true story by the way)

I guess the bookmaker felt he'd never have to pay out whichever way it went.

Interpretation - There is no money to be made betting on an apocalypse.

Wed, 10/12/2011 - 13:03 | 1766300 GeneMarchbanks
GeneMarchbanks's picture

'The US, for all the talk about Lehman, is only doing worse than that since it decided banks couldn’t be allowed to fail.'

One problem, there is no US without the banks at least no government. You have banks + government on one side and a sleepwalking population on the other side.

Wed, 10/12/2011 - 13:08 | 1766327 oogs66
oogs66's picture

i think there would be banks...some would be the same...some would be regionals taking advantage of opportunities and some would be new ones that find opportunities

Wed, 10/12/2011 - 13:12 | 1766341 GeneMarchbanks
GeneMarchbanks's picture

You're right. Eventually something would rise from the rubble but first there would be pain. Show me a US citizen ready, not only to go through, but vote for pain. Yeah, good luck, enjoy Romney or that pizza guy.

Wed, 10/12/2011 - 13:03 | 1766311 legal eagle
legal eagle's picture

If you want to clean house of the TBTF, what needs to happen is all "good" people need to stop paying their mortgages.  All "good" people should also stop paying their credit cards.  The banks have robbed homeowners of clear title, they have taken payments under false pretenses (conversion under the law) they have breached their fiduciary duties to borrowers by clouding titles, selling loans and then double dipping by taking payments without the legal authority to do so, by not working with borrowers in good-faith, by not following recordation laws or paying state fees for recordation, and yet, somehow, people still believe that homeowners move from "good" to "bad" the moment they decide they arent playing by the bank's rules anymore.

Protest by strategically defaulting.  It is the only thing that will make a difference.  If 10M people do this, things will change in a big way.


Wed, 10/12/2011 - 16:48 | 1767109 theabyss11
theabyss11's picture

I've been saying this since 07' Its the only way for the people to regain the power.


Wed, 10/12/2011 - 13:06 | 1766324 Dailo
Dailo's picture


Wed, 10/12/2011 - 13:09 | 1766328 mynhair
mynhair's picture

(No fill on TZA @ 38, moved bid to 37)

Wed, 10/12/2011 - 13:34 | 1766405 cosmictrainwreck
cosmictrainwreck's picture

did you file your App for Primary Dealer status yet?

Wed, 10/12/2011 - 13:13 | 1766333 Mercury
Mercury's picture

Pretty much Peter.

to parahrase my bad self from earlier this morning - governments are still band-aid-ing this globe-spanning Rube Goldberg contraption designed to prevent risk from ever being accurately priced by market forces.

Let the SHTF already, it's only going to make it worse and it already has.

Wed, 10/12/2011 - 13:14 | 1766345 GeneMarchbanks
GeneMarchbanks's picture

'bas delf from earlier this morning:' 

Began the drinking early eh? That green market got ya blue?

Wed, 10/12/2011 - 13:22 | 1766362 slewie the pi-rat
slewie the pi-rat's picture

Credit Event Theater

...brought to you by:  20 Mule Team Borax!

Wed, 10/12/2011 - 13:26 | 1766375 bugs_
bugs_'s picture

waiting for the bank of america moment

Wed, 10/12/2011 - 13:29 | 1766389 gwar5
gwar5's picture

I thought the Euro would crash, die and go away. Certainly my preference. But now, not so sure and think they'll pull it out of their asses and this is all brinkmanship.


The Fed and China will both eventually backstop the EU in exchange for a higher valued EURO currency that both can export to. This is a three ring currency circus being played out amongst the USD/EURO/YUAN. The Eurozone has fallen but can't print or get up by itself so they lose the currency war and will have to keep the EURO value high in exchange for being bailed out. Once the Euro is done, China will accept this new status quo and unpeg the YUAN. The USD will be free to inflate it's debt away. (Rickards)

Bullish for gold.

Wed, 10/12/2011 - 14:49 | 1766673 falun bong
falun bong's picture

The problem was that the CDS got a AAA rating. That meant banks could post them in the repo market as collateral, which meant that if they failed, the bank owed the counterparty the amount in cash within 24 hours. The Lehman moment came when the CDS all started going off like grenades at the same time. To keep all the world's ATMs from showing all zeroes, the Feds finally were forced to step in. Otherwise the CDS could still be sitting on bank balance sheets as impaired assets, or even better, marked to $1.00. Happy days.

The Fed bought them up and now they sit on the Fed's balance sheet. The Fed has become the world's biggest and most leveraged hedge fund ever. Wheeee!!! It's all fun and games until somebody pokes an eye out.

We can probably avoid the eye-poke moment for a long time. The Europeans are just approaching their turn but some people on this post are just not worried about it. Personally I just can't seem to convince myself that the laws of gravity have been revoked. Wily E. Coyote eventually looks down....smoke puff ensues.

Wed, 10/12/2011 - 14:56 | 1766677 Coxxy
Coxxy's picture

The coupon changed on iceland, is that factored in on pricing from CMADatavision?  Can you quote the price using ISDA for Iceland based on CDS from CMADatavision?

Thanks for the useful article, I just hope that CMA priced the coupon change correctly as the spread dropped because of the 100/300/500 convention and points up etc. 

Wed, 10/12/2011 - 14:57 | 1766703 GrinandBearit
GrinandBearit's picture

Amazingly, Yahoo scoops ZH on this...

Goldman and other banksters wants to convert from a bank holding company in order to avoid the Volker trading rules.;_ylt=Aq_bppeiCM8IqA1Y4aoOuze7YWsA;_ylu=X3oDMTE1aHNkNmQwBHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawNnb2xkbWFubW9yZ2E-?x=0&sec=topStories&pos=main&asset=&ccode=

Wed, 10/12/2011 - 15:40 | 1766898 AldoHux_IV
AldoHux_IV's picture

Very well said, everyone framing the avoidable at all cost as the Lehman moment was entirely incorrect.  The biggest threat to this system is the fact that we are making the same mistakes (now prescribed as solutions) and will not fix the problem. End the madness, end the suffering, and end the institutional regimes that continue to enslave the world to debt.

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