Relevant and even prescient commentary on news, politics and the economy.

Default Events, Legal Contracts, Derivatives, and Greece

Barry Ritholtz, who generally knows better, blew a gasket at ISDA for yesterday’s ruling that Greek bonds are not yet in default. Specifically, “The International Swaps and Derivatives Association said on Thursday that based on current evidence the Greek bailout would not prompt payments on the credit default swaps.” > Here is a question for […]


Robert Waldmann ended my last post 5 minutes ago wishing for part III of the saga and here it is !The final act for AIG by Robert O’Harrow Jr. and Brady Dennis The collapse was, of course, quick when it came. One interesting fact is that AIG Financial Products (AIGFP) stopped writing new CDSs in […]


Robert Waldmann The second of three parts of Dennis and O’Harrow’s series on the downfall of AIG introduces two new features—credit default saps and Joseph Cassano. Together the two managed to bring down AIG. Thus far we have only read about how AIG got into the business of writing CDSs — it seemed too good […]


Robert Waldmann Over at the Washington Post, Robert O’Harrow Jr. and Brady Dennis have a fairly interesting first of 3 articles on what went wrong at AIG. Of course, they tend to stress personalities and personal conflicts, but they do slip in some good points about economics. I’d say the key bit was that AIG […]

45 trillion credit swap market…how big is that?

The ABX.HE index, which is based on credit default swaps on different tranches of subprime mortgage-backed securities. (Federal Reserve Bank of Cleveland) Hat tip to Jim Satterfield for this link to Marketplace public radio. Bob Moon is the Senior Business Correspondent. MOON: OK, I’m about to unload some numbers on you here, so I’ll speak […]