Tuesday, August 26, 2008

CDS - Credit Default Swaps

The Economist has an interesting piece on the role of CDS - credit default swaps. Not surprisingly the cost of insuring debt has gone up...
The five-year CDS spread had more than doubled to 740 basis points (bps), meaning it cost $740,000 to insure $10m of its debt.


Also of interest is the increasing use of the CDS market to speculate on firms. In essence this might provide a means of betting on a firm's declining credit.
at
Labels: , ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

What's going on with inflation?

I recently posted an article on the Poole College Thought Leadership page titled: " What's going on with inflation?" .  This w...

  • Twitter predicting the stock market? I doubt it.
    A recent paper by some computer science folks at Indiana finds that the mood on twitter can predict movements in the Dow Jones Industrial A...
  • Arca ECN
    It's not often that you can see a financial market in action in real time. Check out the Arca ECN . (Be sure to click on the java book...
  • What's going on with inflation?
    I recently posted an article on the Poole College Thought Leadership page titled: " What's going on with inflation?" .  This w...