Info on the financial crisis

[Craig234]

In the American media, in the discussion here including Wall Street people, I haven't seen mention of "Credit Default Swaps".

For an idea how the games on Wall Street are going on, while it seems we can't get a word on things like this from our own media, take a look at this BBS report:

BBC link

Note, the link goes to the story now but won't stay on it later.

 

[babylon5]

I can only see until the Picasso artists preview, but I can't find the main story

 

[blinky8225]

http://news.bbc.co.uk/2/hi/pro.../newsnight/7506653.stm

I could only find a video unfortunately. It doesn't seem like anything that groundbreaking to me, however. I always knew banks had complicated instruments to distribute risk. This just gives a name to it.

 

[Pabster]

You're just realizing this Craig? :laugh:

'Credit Default Swaps' have been around for a long, long time.

 

[babylon5]

I doubt most average Americans out there even heard of it.

Good to see a few got rich while taxpayers bare all the risk.

 

[Jhhnn]

Originally posted by: Pabster
You're just realizing this Craig? :laugh:

'Credit Default Swaps' have been around for a long, long time.

That's true, but ignores the point entirely- current CDS activity far exceeds the real liabilities of the involved firms, creating huge additional liabilities.

It's like horse racing. Instead of investing in the breeding and training of horses, the players are simply betting on the outcome of the race- the total wagers far exceed investment in the whole enterprise, dwarf the purse for winning... and the bets aren't placed with cash, or even on the basis of margin accounts, but merely with a promise to pay if the participant loses...

 

[wwswimming]

John Mauldin at
http://www.investorsinsight.com/

has been writing about Credit Derivatives a lot the last 8 months or so.

i read an article in the SD Union Tribune about a week ago, that gave
Michael Milken some of the credit for bundling junk bonds into an equity-like
product when he was doing his thing at Drexel, in the '80's.

 

[Pabster]

Originally posted by: Jhhnn
That's true, but ignores the point entirely- current CDS activity far exceeds the real liabilities of the involved firms, creating huge additional liabilities.

Oh, I agree on that. But it is all fun and games until someone loses.

 

[LegendKiller]

Is this separating out notional value? WHat about synthetic securities?


The numbers are oft inflated because people don't understand the nature of the number.

 

[jman19]

Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

 

[Craig234]

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

 

[LegendKiller]

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

They have been in the financial headlines everywhere. The MarkIT ABX indexes are based off of CDS rates for RMBS bonds. CDS' were the focal point in many different gauges of the "deadpool" for financial institutions, as they can be a decent benchmark for how the market looks at the likelihood of default.

The value of them are overstated, at the "notional" which is far less than the actual payout will be.

 

[jman19]

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

My post DID have a point - that you are uneducated on the topic and making a big deal out of it. The media doesn't exist to spoon feed you every little bit of information in big sweeping headlines. Take your head out of the sand and do some research.

 

[Craig234]

Originally posted by: jman19

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

My post DID have a point - that you are uneducated on the topic and making a big deal out of it. The media doesn't exist to spoon feed you every little bit of information in big sweeping headlines. Take your head out of the sand and do some research.

I could be the most informed person on economics in the US and say the same thing about the media's shortcomings in educating the public - and you are sounding MORE like a jerk.

You appear not to have any conception of the issue of the need for the society to be informed - as long as the info is available somewhere, who cares what the largest media put out, who cares what the level of being informed of the public actually is, that's completely irrelelevant as long as the info is available for those who search for it. I'm really not interested in any further discussion with you on this, jman. You say you have a point, but I disagree. I think you have completely missed the point - and been a jerk.

 

[jman19]

Originally posted by: Craig234

Originally posted by: jman19

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

My post DID have a point - that you are uneducated on the topic and making a big deal out of it. The media doesn't exist to spoon feed you every little bit of information in big sweeping headlines. Take your head out of the sand and do some research.

I could be the most informed person on economics in the US and say the same thing about the media's shortcomings in educating the public - and you are sounding MORE like a jerk.

You appear not to have any conception of the issue of the need for the society to be informed - as long as the info is available somewhere, who cares what the largest media put out, who cares what the level of being informed of the public actually is, that's completely irrelelevant as long as the info is available for those who search for it. I'm really not interested in any further discussion with you on this, jman. You say you have a point, but I disagree. I think you have completely missed the point - and been a jerk.

My point is you're wrong. The info IS there. Just because you didn't educate yourself on it doesn't mean the media hasn't done its job. Lazy people like to be spoon fed everything it seems.

 

[soccerballtux]

Originally posted by: jman19

Originally posted by: Craig234

Originally posted by: jman19

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

My post DID have a point - that you are uneducated on the topic and making a big deal out of it. The media doesn't exist to spoon feed you every little bit of information in big sweeping headlines. Take your head out of the sand and do some research.

I could be the most informed person on economics in the US and say the same thing about the media's shortcomings in educating the public - and you are sounding MORE like a jerk.

You appear not to have any conception of the issue of the need for the society to be informed - as long as the info is available somewhere, who cares what the largest media put out, who cares what the level of being informed of the public actually is, that's completely irrelelevant as long as the info is available for those who search for it. I'm really not interested in any further discussion with you on this, jman. You say you have a point, but I disagree. I think you have completely missed the point - and been a jerk.

My point is you're wrong. The info IS there. Just because you didn't educate yourself on it doesn't mean the media hasn't done its job. Lazy people like to be spoon fed everything it seems.

My biggest problem with this is the barrier to entry to finding a reliable, unbiased source. Both in reporting, as well as simply informing on terminology and the like.

 

[glenn1]

Originally posted by: Craig234

Originally posted by: jman19

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

My post DID have a point - that you are uneducated on the topic and making a big deal out of it. The media doesn't exist to spoon feed you every little bit of information in big sweeping headlines. Take your head out of the sand and do some research.

I could be the most informed person on economics in the US and say the same thing about the media's shortcomings in educating the public - and you are sounding MORE like a jerk.

You appear not to have any conception of the issue of the need for the society to be informed - as long as the info is available somewhere, who cares what the largest media put out, who cares what the level of being informed of the public actually is, that's completely irrelelevant as long as the info is available for those who search for it. I'm really not interested in any further discussion with you on this, jman. You say you have a point, but I disagree. I think you have completely missed the point - and been a jerk.

I'm have to side with Craig on this one. The average layman should really have no need to know anything at all about CDS's. People not in the industry pay big money to financial advisors to keep track of the alphabet soup of the industry; why DRIPs differ from PIPES, or to tell a LEAP from an ARS.

At the very least, since some here seem to know quite a bit more on the subject, they should help the others who don't get up to speed rather than berating them. I'm sure Craig would do the same on a different subject he was an expert on and you weren't.

 

[Double Trouble]

Have you ever watched "Jaywalking" ?? A significant percentage of people could not tell you the name of the vice president, or which country is on the northern border of the US. There are idiots falling for nigerian scams every day.... and you think this is a topic the main stream media is going to cover? Get real. The "housing crisis" is something that people understand, they understand that they can't sell their house. This is waaaaaay to technical and complex an issue for the main stream media to discuss. In the media covering the financial industry this has been very much in focus for a while now....

 

[jman19]

Originally posted by: glenn1

Originally posted by: Craig234

Originally posted by: jman19

Originally posted by: Craig234

Originally posted by: jman19
Craig, you are pretty damn ignorant. People have been talking about the effects of derivatives hedging with regards to our current credit crisis for almost a year now.

And I'd say you're a bit of a jerk for your comment. You can see the topic discussed in some area, *of course* - it's not a secret - but the mainstream media pretty has had very little to say about it IMO in the headlines. You can see about 500 mentions of 'the housing crisis' and 'the foreclosure crisis' for one mention of "Credit Default Swaps". The media is doing a pretty lousy job of educating people IMO, and if that's fine with you, we disagree. If you had anything to addd to the discussion, it's not shown in your wasted post.

My post DID have a point - that you are uneducated on the topic and making a big deal out of it. The media doesn't exist to spoon feed you every little bit of information in big sweeping headlines. Take your head out of the sand and do some research.

I could be the most informed person on economics in the US and say the same thing about the media's shortcomings in educating the public - and you are sounding MORE like a jerk.

You appear not to have any conception of the issue of the need for the society to be informed - as long as the info is available somewhere, who cares what the largest media put out, who cares what the level of being informed of the public actually is, that's completely irrelelevant as long as the info is available for those who search for it. I'm really not interested in any further discussion with you on this, jman. You say you have a point, but I disagree. I think you have completely missed the point - and been a jerk.

I'm have to side with Craig on this one. The average layman should really have no need to know anything at all about CDS's. People not in the industry pay big money to financial advisors to keep track of the alphabet soup of the industry; why DRIPs differ from PIPES, or to tell a LEAP from an ARS.

At the very least, since some here seem to know quite a bit more on the subject, they should help the others who don't get up to speed rather than berating them. I'm sure Craig would do the same on a different subject he was an expert on and you weren't.

I'm not berating him for not knowing what a CDS is - I'm berating him because he thinks it's something that hasn't been discussed and it has. I do agree that the complexity behind the financial markets can make things difficult when things go to hell and they impact the day to day lives of the average person.