Comments on: Read This http://www.aleablog.com/read-this/ Alea Jacta Est Mon, 12 Jul 2010 20:04:31 +0000 hourly 1 http://wordpress.org/?v=3.0 By: CapVandal http://www.aleablog.com/read-this/#comment-3239 CapVandal Fri, 12 Jun 2009 05:56:35 +0000 http://www.aleablog.com/?p=3755#comment-3239 It's about time. It was obvious that there was a problem when the notional value of default swaps exceeded the referenced security. In the insurance business, they have had centuries to figure out that it is important to have an insurable interest to prevent abuses. For example, buying life insurance on someone else, or fire insurance on someone else's house. It’s about time.

It was obvious that there was a problem when the notional value of default swaps exceeded the referenced security.

In the insurance business, they have had centuries to figure out that it is important to have an insurable interest to prevent abuses. For example, buying life insurance on someone else, or fire insurance on someone else’s house.

]]> By: Joe Hill http://www.aleablog.com/read-this/#comment-3237 Joe Hill Thu, 11 Jun 2009 22:45:32 +0000 http://www.aleablog.com/?p=3755#comment-3237 Just in case no one has a subscription to WSJ, here is a synopsis at http://blogs.reuters.com/felix-salmon/2009/06/11/amhersts-cds-coup/ This is the hilarious slap-in-the-face that I have been waiting for (and from a small shop out of Texas! who woulda thunk!) Just in case no one has a subscription to WSJ, here is a synopsis at http://blogs.reuters.com/felix-salmon/2009/06/11/amhersts-cds-coup/
This is the hilarious slap-in-the-face that I have been waiting for (and from a small shop out of Texas! who woulda thunk!)

]]> By: jck http://www.aleablog.com/read-this/#comment-3235 jck Thu, 11 Jun 2009 20:35:16 +0000 http://www.aleablog.com/?p=3755#comment-3235 Hiring Laurie Goodman was a clever move, former UBS and author of my favorite books on everything CDOs and Subprime mortgages. Hiring Laurie Goodman was a clever move, former UBS and author of my favorite books on everything CDOs and Subprime mortgages.

]]> By: David Merkel http://www.aleablog.com/read-this/#comment-3234 David Merkel Thu, 11 Jun 2009 17:57:16 +0000 http://www.aleablog.com/?p=3755#comment-3234 Nominate Amherst for the investing Oscar "For most creative use of a cleanup call." Way cool, and makes the pricing of CDS on securities with cleanup calls much more complex. Nominate Amherst for the investing Oscar “For most creative use of a cleanup call.” Way cool, and makes the pricing of CDS on securities with cleanup calls much more complex.

]]> By: Matt Swanholm http://www.aleablog.com/read-this/#comment-3233 Matt Swanholm Thu, 11 Jun 2009 17:23:34 +0000 http://www.aleablog.com/?p=3755#comment-3233 JPM and RBS traders were unaware of cleanup call provisions? Wow. JPM and RBS traders were unaware of cleanup call provisions? Wow.

]]> By: acc http://www.aleablog.com/read-this/#comment-3232 acc Thu, 11 Jun 2009 15:54:13 +0000 http://www.aleablog.com/?p=3755#comment-3232 ROFLOL ROFLOL

]]> By: jck http://www.aleablog.com/read-this/#comment-3231 jck Thu, 11 Jun 2009 15:46:12 +0000 http://www.aleablog.com/?p=3755#comment-3231 The big boys didn't read the prospectus and got taken by someone who did. That's all there is to it. They have no excuses and no ground for complaints, imho. The big boys didn’t read the prospectus and got taken by someone who did. That’s all there is to it. They have no excuses and no ground for complaints, imho.

]]> By: Keith Wright http://www.aleablog.com/read-this/#comment-3230 Keith Wright Thu, 11 Jun 2009 15:36:03 +0000 http://www.aleablog.com/?p=3755#comment-3230 The big boys are mostly pissed that they didn't think of it themselves, right? Don't they get the same 10c/$ that they expected from buying insurance at 90c/$. They missed a creative exit strategy and someone profited in a big way off of them, and 'it wasn't nice'. Am I missing some part of the mechanism that hurt the banks more than they first expected? The big boys are mostly pissed that they didn’t think of it themselves, right? Don’t they get the same 10c/$ that they expected from buying insurance at 90c/$. They missed a creative exit strategy and someone profited in a big way off of them, and ‘it wasn’t nice’.

Am I missing some part of the mechanism that hurt the banks more than they first expected?

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