Friday, February 29, 2008

CDS $45.5 Trillion versus Stock Market $21.9 Trillion.. theres only one way to find out….FIGHT

A Misleading Chart on Credit Default Swaps

Apologies to Harry Hill! This is about the graphics that were posted onto this site earlier this month. This jorno basically says that the CDS values are not as big because they are notional amounts not actual. A Corrorally is the S&P futures and the stock market. The stockmarket is the actual physical value of the shares were traders trade the S&P based on $250 thimes the index (used to be $500 times the index) - so the notional value of contracts traded is huge. Hes comparing the CDS value used of $45m - in effect with the notional value of the S&P futures (at least thats what i think he's saying!!).

Posted by techieman @ 08:53 AM (808 views)
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4 thoughts on “CDS $45.5 Trillion versus Stock Market $21.9 Trillion.. theres only one way to find out….FIGHT

  • theres only one way to find out….FIGHT ??

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  • sorry hr – my attempt at humour – its based on Harry Hill’s TV burp. CDS v Stock market… who will win… there’s only one way to find out…fight. Well seemed funny at the time!!

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  • ok thanks. I imagine the truth is somewhere in between. Not $45 trillion waiting to implode but not a benign set of insurances that neatly cancel each other out to off-set risk. Just like subprime I bet there will be the musical chairs effect with who is the last idiot to hold the rotten ones.

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  • The CDS graph looks like a classic unsustainable bubble shape to me.

    Is this where all the new money being created is going?
    Well it can’t be stocks or mortgages anymore?

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