Credit Default Swaps Archives

Creditless-Default Swaps?

By Econ70 | 02/07/2012

As the Greek government defaults on its bonds, holders of Greek credit-default swaps will probably get nothing as the default will be “selective” and will thus not officially trigger a default. This not only hurts banks who thought they were hedging by buying the CDSs, but also Portugal as it will discourage banks from holding…

Greek Tragedy

By Econ70 | 05/09/2011

The Greek 10-yr gov’t bond yield is 14.7%, 11.5% above comparable German bonds. The 2-yr Greek note is trading at 22.2%, 20.45 % above the German 2-yr note. The cost of insuring Greek sovereign bonds jumped to 1,422 basis points based on the Bloomberg London 5-yr credit default swap. These swap prices signal more than…