tag:blogger.com,1999:blog-1071929283851324412.post594053155063340079..comments2023-11-05T06:12:15.691-05:00Comments on VIX Review: The Next Potential CatastropheBeamer Doghttp://www.blogger.com/profile/13885984304062855191noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1071929283851324412.post-17340542133553444442009-04-22T17:07:00.000-04:002009-04-22T17:07:00.000-04:00Just to clarify - not all bondholders are built eq...Just to clarify - not all bondholders are built equally. SOME bondholders dont have CDS protection (small grannies in Indiana who bought 20 years ago). OTHER bondholders like big wall st pimpco type ppl have cds protection. <br /><br />Obama's game is to drag out the process for as long as possible so that the bondholders have to keep paying protection money to the insurance CDS sellers. This artificially inflates earnings for pigs like AIG. At least before the inevitable payout.In Debt We Trusthttps://www.blogger.com/profile/05283475872936333396noreply@blogger.comtag:blogger.com,1999:blog-1071929283851324412.post-64966436825724357182009-04-22T16:52:00.000-04:002009-04-22T16:52:00.000-04:00Thanks In Debt. I don't proclaim to be an expert ...Thanks In Debt. I don't proclaim to be an expert on the subject but based on what I am hearing and reading, it all just stinks. Chrysler deserves to go under but the way it is happening is a complete conflict of interest and in the end, it is the middle class and taxpayers who get screwed while Wall Street counts their money.Beamer Doghttps://www.blogger.com/profile/13885984304062855191noreply@blogger.comtag:blogger.com,1999:blog-1071929283851324412.post-31608116430438036032009-04-22T16:16:00.000-04:002009-04-22T16:16:00.000-04:00Your analysis is a bit off. The bondholders will ...Your analysis is a bit off. The bondholders will get 100% compensation - through their CDS holdings.<br /><br />In fact, there is a lively debate going on in the legal world about the conflicts of interest b/t bondholders who are also CDS holders and the other interested parties such as employees and suppliers. The CDS bondholders have a perverse incentive to push for bankruptcy since they bid low ball on the bonds and will get paid for full par in the event of a bond default.<br /><br />The administration's response is to delay this event for as long as possible so that a smooth and efficient transfer of liability can be made to the US taxpayers. Otherwise, a straight CDS payout will hammer financial earnings.<br /><br />*The same situation is going on w/GM and F.In Debt We Trusthttps://www.blogger.com/profile/05283475872936333396noreply@blogger.com