"Profit from your knowledge!"
The Bull Bear Trader discusses market events and news with an interest in understanding risk and return in both bull and bear markets. Discussion topics include trading and hedging strategies, derivatives, risk management, hedge funds, quantitative finance, the energy and commodity markets, and private equity, as well as an occasional investment opinion.
Tuesday, November 4, 2008
CDS Notional Value Less Than Expected
As reported at the Deal Book blog, the total size of credit default swaps outstanding on corporate, government, and asset-backed securities is "only" $33.6 trillion, smaller than the previous estimates of +$50 trillion. The largest CDS dollar amounts were written against debt for Merrill Lynch, Goldman Sachs, Morgan Stanley, GE Capital, Countrywide, GMAC, and government debt in Turkey, Italy, Brazil, and Russia. Nonetheless, much of the notional value has been reduced through hedging. The weekly reports are being offered by the Depository Trust and Clearing Corporation, and are expected to also include trade volume and turnover in future reports. Expect more transparency going forward. A little sunlight is the best disinfectant.
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