Category: CDSs

How DARE you question our credit?

11 January, 2011 (12:36) | Bankruptcy, CDSs, Credit default swap, Insurance, Municipal bankruptcy, Speculation, State bankruptcy, US News |

By: David A. Smith   Long, long ago, I learned that business operates by different rules than does society.  In social settings, asking direct or personal questions can be rude or offensive, but in business, it’s par for the course.   “Sal, it’s not personal, it’s just business.”   So it is with the emerging […]

White snow, red ink, black swan: Part 2, unfortunately, you bought our never-pay policy

11 February, 2010 (10:39) | Capital markets, CDSs, Finance, Regulation, Snow, Speculation, United Kingdom | 1 comment

By: David A. Smith   [Continued from yesterday’s Part 1.]   Yesterday, in our real-world metaphor for capital markets’ shenanigans, we encountered probabilistic meteorologist Cliff Bryant, who parlayed his interest in White Christmases into two tickets that, if honored as he thinks they should be honored, will be worth several million pounds.   Might two […]

White snow, red ink, black swan: Part 1, you fool, you just won

10 February, 2010 (11:26) | Capital markets, CDSs, Finance, Regulation, Speculation, United Kingdom |

By: David A. Smith   Want to bet whether it’s going to snow tonight?    Odds of winning slim?   Every now and then, nature offers us a visual metaphor for an abstract principle of finance – so for our little tale of complex derivatives and interdependency among financial instruments, we need look no further […]