dunk

ThirdRailForum

  • June 20, 2018, 01:29:04 PM
  • Welcome, Guest
Please login or register.

Login with username, password and session length
Advanced search  

News:

Pages: [1]   Go Down

Author Topic: JP Morgan loss: what is a credit default swap?  (Read 436 times)

plus minus reset
0 Members and 1 Guest are viewing this topic.

MurdochTopic starter

  • Not Boring
  • News Bot
  • ***
  • Reputation Power: 1
  • Murdoch probably just rolled in here.
  • Posts: 69
  • Location: Cyberspace
  • Fan of: Voicemail
  • Fair and Balanced
JP Morgan loss: what is a credit default swap?
« on: May 14, 2012, 11:03:02 AM »

JP Morgan loss: what is a credit default swap?

CDSs may have caused the $2bn loss at JP Morgan – no wonder Warren Buffet called them a 'weapon of mass destruction'

Credit default swaps (CDSs) are a form of insurance on bonds issued by companies and countries that investors can buy and sell. If it looks like an issuer may have trouble paying – such as Greece, for example – the CDS price rises because the bond is more risky and it will cost more to insure.

CDSs were dreamed up in the late 1990s and became very popular, very quickly. In 2000, the market was worth $900bn (£560bn). By 2008, it was more than $30 trillion.

They can be used by bond investors – as a hedge against potential defaults – or traded separately when they are called naked CDSs.

The case against CDS contracts is usually explained using house insurance as an example: it is not possible to take out an insurance policy on someone else's house – because you would then have a financial interest in burning it down. Investors with no interest in the underlying bond can buy and sell CDSs – and profit from its demise. Greece has blamed speculators trading in CDS contracts on Greek bonds for pushing up government fundraising costs.

Regulators have blamed speculators and their trades in naked CDSs for exacerbating the problems faced by Greece and increasing its borrowing costs. The European commission president, José Manuel Barroso, believes speculative CDS trading has been an "aggravating factor" in the Greek debt crisis.

They also have been blamed for triggering the 2008 financial crisis. In 2003 Warren Buffett called them "weapons of mass destruction".

CDS trades also reportedly led to the $2bn loss at JP Morgan.


guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds





Source: JP Morgan loss: what is a credit default swap?
Logged


"I challenge anybody to show me an example of bias in Fox News Channel."

Biblestudent_007

  • Governor
  • *
  • Reputation Power: 10
  • Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.
  • Posts: 548
  • Gender: Male
  • Preference>>>None
Re: JP Morgan loss: what is a credit default swap?
« Reply #1 on: May 18, 2012, 06:20:04 PM »

You'll find the exact answer in a (reference book) explaining the financial jargon.
Logged

THE BRA1N

  • Menace to Piety
  • Augustus
  • *
  • Reputation Power: 311
  • THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.
  • Posts: 14738
  • Gender: Male
  • Fan of: Robert Mueller
  • Awards: 500 Replies - Eisbaer the drifter..300 Replies - Eisbaer the drifter..200 Replies - Eisbaer the drifter..100 Replies - Eisbaer the drifter..100 Replies - My Field Trip to Flame Truth100 Replies - Countdown to Fleas Ban Expiration200 Replies - So what did I miss100 Replies - So what did I miss100 Replies - An ultimatum from Sting2016 Fantasy Football Champ100 Replies - Anyone else miss V-Agent?100 Replies - Lets Get Mr.Pickles Hyped to Post Again100 Replies - ATTN: Mini/NA300 Replies - Jan 1 is Use Your..200 Replies - Jan 1 is Use Your..100 Replies - Jan 1 is Use Your..100 Replies - Dullard of the Year Final - Goats vs Sting100 Replies - Forum Dullard Poll, The Finals100 Replies - TR Forum Dullard Poll100 Reply Thread -  	TRF MVP Poster Ratings - March100 Reply Thread - Caskur PM Dump Thread100 Reply Thread - Is Cookie a Potential Serial Killer?100 Reply Thread -Lets Have Lunch100 Reply Thread - Posters youd like to hear from..200 Reply Thread - Another war is..100 Reply Thread - Another war..200+ Reply Thread - Happy New Year100+ Reply Thread - Happy New Year100+ Reply Thread - Im Going to London2010 World Cup Picks Winner2012 NFL Picks Champ100+ Reply Thread - Question: Should Prostitution be Legalized?100+ Reply Thread - Heres what the right wing rhetoric does to people
Re: JP Morgan loss: what is a credit default swap?
« Reply #2 on: May 19, 2012, 02:58:23 AM »

You'll find the exact answer in a (reference book) explaining the financial jargon.

I'm totally lost now. Any idea where I can find a (reference book)? I went to get my car washed today but didn't see any (reference books) there, let alone one about financial jargon. Thanks man. You are a great resource for information.
Logged
Symptoms of Narcissistic Personality Disorder
  • Grandiosity with expectations of superior treatment from others
  • Fixated on fantasies of power, success, intelligence, attractiveness, etc.
  • Self-perception of being unique, superior and associated with high-status people and institutions
  • Needing constant admiration from others
  • Sense of entitlement to special treatment and to obedience from others
  • Exploitative of others to achieve personal gain
  • Unwilling to empathize with others' feelings, wishes, or needs
  • Intensely envious of others and the belief that others are equally envious of them
  • Pompous and arrogant demeanor

Biblestudent_007

  • Governor
  • *
  • Reputation Power: 10
  • Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.
  • Posts: 548
  • Gender: Male
  • Preference>>>None
Re: JP Morgan loss: what is a credit default swap?
« Reply #3 on: May 20, 2012, 01:48:39 AM »

I'm totally lost now. Any idea where I can find a (reference book)? I went to get my car washed today but didn't see any (reference books) there, let alone one about financial jargon. Thanks man. You are a great resource for information.

Major universities have them. That info will legally be in college textbooks sold in correllation with the course curriculum.

Logged

cardtrick

  • Imperator
  • *
  • Reputation Power: 56
  • cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.cardtrick has a place in the TRF Hall of Fame.
  • Posts: 3068
  • Gender: Female
  • Location: NY
  • Awards: 100 Reply - You Morons100 Reply Thread - Donald Trump100 Reply Thread - Evil Blood
Re: JP Morgan loss: what is a credit default swap?
« Reply #4 on: May 20, 2012, 03:03:24 AM »

Bra1n, you're a lawyer.

You would have not have asked the question if you did not know the answer.

Yes, and get the car washed. Someday, those AMC Ambassadors will be collectible.
Logged

THE BRA1N

  • Menace to Piety
  • Augustus
  • *
  • Reputation Power: 311
  • THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.THE BRA1N has a place in the TRF Hall of Fame.
  • Posts: 14738
  • Gender: Male
  • Fan of: Robert Mueller
  • Awards: 500 Replies - Eisbaer the drifter..300 Replies - Eisbaer the drifter..200 Replies - Eisbaer the drifter..100 Replies - Eisbaer the drifter..100 Replies - My Field Trip to Flame Truth100 Replies - Countdown to Fleas Ban Expiration200 Replies - So what did I miss100 Replies - So what did I miss100 Replies - An ultimatum from Sting2016 Fantasy Football Champ100 Replies - Anyone else miss V-Agent?100 Replies - Lets Get Mr.Pickles Hyped to Post Again100 Replies - ATTN: Mini/NA300 Replies - Jan 1 is Use Your..200 Replies - Jan 1 is Use Your..100 Replies - Jan 1 is Use Your..100 Replies - Dullard of the Year Final - Goats vs Sting100 Replies - Forum Dullard Poll, The Finals100 Replies - TR Forum Dullard Poll100 Reply Thread -  	TRF MVP Poster Ratings - March100 Reply Thread - Caskur PM Dump Thread100 Reply Thread - Is Cookie a Potential Serial Killer?100 Reply Thread -Lets Have Lunch100 Reply Thread - Posters youd like to hear from..200 Reply Thread - Another war is..100 Reply Thread - Another war..200+ Reply Thread - Happy New Year100+ Reply Thread - Happy New Year100+ Reply Thread - Im Going to London2010 World Cup Picks Winner2012 NFL Picks Champ100+ Reply Thread - Question: Should Prostitution be Legalized?100+ Reply Thread - Heres what the right wing rhetoric does to people
Re: JP Morgan loss: what is a credit default swap?
« Reply #5 on: May 20, 2012, 07:57:56 PM »

Bra1n, you're a lawyer.

Allegedly.  :orly:

That has not been confirmed or denied but putting it aside, that truism about asking questions only applies at the courthouse. Not, for example, at depositions or at a client conference or at a continuing legal education seminar.


Major universities have them. That info will legally be in college textbooks sold in correllation with the course curriculum.

Brilliant. Hey, if major universities have them, do you think that minor ones might legally have them too? There is one close to where I live but I don't want to go there looking for a course book only to find that they are illegal textbooks and come away disappointed.

Logged
Symptoms of Narcissistic Personality Disorder
  • Grandiosity with expectations of superior treatment from others
  • Fixated on fantasies of power, success, intelligence, attractiveness, etc.
  • Self-perception of being unique, superior and associated with high-status people and institutions
  • Needing constant admiration from others
  • Sense of entitlement to special treatment and to obedience from others
  • Exploitative of others to achieve personal gain
  • Unwilling to empathize with others' feelings, wishes, or needs
  • Intensely envious of others and the belief that others are equally envious of them
  • Pompous and arrogant demeanor

Biblestudent_007

  • Governor
  • *
  • Reputation Power: 10
  • Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.Biblestudent_007 is acknowledged by some.
  • Posts: 548
  • Gender: Male
  • Preference>>>None
Re: JP Morgan loss: what is a credit default swap?
« Reply #6 on: May 21, 2012, 07:20:19 PM »

Brilliant. Hey, if major universities have them, do you think that minor ones might legally have them too? There is one close to where I live but I don't want to go there looking for a course book only to find that they are illegal textbooks and come away disappointed.

Hmm, nah when I spent some time at TSTC Texas State Technical College - the campus center had textbooks and software for sale to registering students.
Logged
Pages: [1]   Go Up
 

Page created in 0.313 seconds with 34 queries.