Monday, March 2, 2009

New York City CDS Back To All Time Wides

The increasing risk of everything imploding into the financial singularity known as AIG has caused not only sovereign risk to blow out to never before seen risk levels, but also that of cities and states. New York City 5 year CDS was last seen trading at 335/355, implying (per the JPM recently oursourced black box model) a 50% chance of default in 5 years (granted assuming 80% recovery which may be a stretch). So for all those who are planning on buying real estate in the City, you may want to ride it out on rent for the next 3-4 years. One of the positive side effects of a municipal bankruptcy tends to be an 80% price cut on that 2000 sq. foot loft in Tribeca you have had your eye on (and getting mugged at gunpoint every time you leave it).

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7 comments:

Anonymous said...

They label nyc as "apple" in bloomberg? That's kinda funny.

Tyler Durden said...

Zero Hedge bar of soap winner for attention to detail. Yes... yes it is.

sara said...

to the author of this blog:

I recently stumbled across your blog. thank you so much for all your posts. I could no longer rely on the MSM, which in my view is just an extension of the Obama administration. So I no longer trust nor watch them.

Sites like yours are invaluable, I normally only lurk, but I had to post a huge thank you for your blog!

keep up the great work!

Gentlemutt said...

one of the ironies that historians years from now will indubitably relish is that the Mayor presiding over the Crime Scene owns the biggest pipes and tubes of the financial interweb -- with which many of the crimes that rotted 'his apple' were committed...

our Pericles.

CreditTrader said...

Hey Tyler - coupla docs from ISDA (and conf call tomorrow) on CDS Big Bang...
http://www.isda.org/companies/auctionhardwiring/auctionhardwiring.html

http://www.isda.org/companies/auctionhardwiring/auctionhardwiringterms2.html

Tyler Durden said...

ISDA seems to think it is paid by the word. Looks like an adendum to the cash settlement gold mine. have a feeling the only readers who would care are the ones who wondered why bespoke Collaterlized Swap Obligations pushed GECC CDS to points up today.

Roy Zimmerhansl said...

Nice timing as this co-incides with the Jim Rogers video on CNBC saying financial centers are in trouble for the foreseeable future. Put a reference to this post in my blog www.stocklendingtoday.com