tag:blogger.com,1999:blog-4863014635257598503.post2090453345516235241..comments2024-02-27T22:18:53.706-05:00Comments on Zero Hedge: The CDS Armageddon Count Up - US Risk Passes 100 BpsTyler Durdenhttp://www.blogger.com/profile/00165439451205639523noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-4863014635257598503.post-59949831541196434702009-02-20T16:09:00.000-05:002009-02-20T16:09:00.000-05:00For a default to even be possible you need a depre...For a default to even be possible you need a depression AND extreme inflation - two things that don't normally go together.<BR/><BR/>Inflation is a prerequisite for government default (in government's own fiat currency), because otherwise printing money is a painless option, especially if you give it a respectable name like "quantitative easing".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-74772558459346708372009-02-20T14:45:00.000-05:002009-02-20T14:45:00.000-05:00I don't understand this move, although I admit to ...I don't understand this move, although I admit to not knowing the nuances of the contract. But, you have Helicopter Ben at the Fed, combined with the fact that Sovereign currency issuers have no default risk if they don't want it. <BR/><BR/>Id est by being a currency issuer they have traded default risk for inflation risk. The US will never default they will just inflate. See <A HREF="http://baselinescenario.files.wordpress.com/2009/01/campbell-neemrana-presentation2.pdf" REL="nofollow">Campbell</A>.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-63053577103545076982009-02-20T14:42:00.000-05:002009-02-20T14:42:00.000-05:00It's early. There's time to transfer these contrac...It's early. There's time to transfer these contracts to a place or exchange where they can indeed live on, and one party can at least attempt to force payment. These contracts strike me, right now, as an option on the possibility that a clearer path to payout is eventually established.www.gregor.ushttps://www.blogger.com/profile/14172143997858920566noreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-72711881164806911062009-02-20T14:37:00.000-05:002009-02-20T14:37:00.000-05:00all cds trades occur via broker intermediate. if u...all cds trades occur via broker intermediate. if us is dunzo no trades will be executedTyler Durdenhttps://www.blogger.com/profile/00165439451205639523noreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-47287124236033641192009-02-20T14:28:00.000-05:002009-02-20T14:28:00.000-05:00not sure i understand. If two european hfs are fac...not sure i understand. If two european hfs are facing each other on a USA contract, and there was a event of default on US sovereign debt why wouldn't the cds pay out? (i.e. hf a pays to hf b)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-85368013312277332342009-02-20T14:21:00.000-05:002009-02-20T14:21:00.000-05:00somebody has to pay you in case of default. as us ...somebody has to pay you in case of default. as us will be done, nobody would be able to fulfil the other side's obligationTyler Durdenhttps://www.blogger.com/profile/00165439451205639523noreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-13800486777188713982009-02-20T14:16:00.000-05:002009-02-20T14:16:00.000-05:00dumb question: something particular to the way US ...dumb question: something particular to the way US sovereign CDS is written or you just saying if the US ever actually defaulted we'd all be blown to bits...?Anonymousnoreply@blogger.com