Author Topic: Credit Default Swaps  (Read 2270 times)

valuecfa

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Credit Default Swaps
« on: February 23, 2009, 09:25:43 AM »
I think Mr. Market is forgetting that we still have nearly 10% of our equity in credit default swaps. ;)


SFValue

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Re: Credit Default Swaps
« Reply #1 on: February 23, 2009, 09:51:16 AM »
If you bought FFH a couple years ago for the CDS, TYs, etc...you have a logical reason to sell now that they have closed (most) of those positions. 

What is interesting to me, is that since selling based on them closing certain positions (and opening others) is implicitilly saying that now their current investments are wrong and the market price of their portfolio is an accurate reflection of reality.

it is hard to imagine a better bunch flushed with cash in this markets.

question:

if the current destruction of capital plus having had the 3rd costliest hurricane in history does not hardened pricing, what will?

what about purchasing power from ins. buyers, they are certainly hurting too...

thanks,

SFValue

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Re: Credit Default Swaps
« Reply #2 on: February 23, 2009, 11:51:54 AM »
more problems for AIG, CNBC reporting they need more money from gov.
less and less capacity out there.

Zorrofan

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Re: Credit Default Swaps
« Reply #3 on: February 24, 2009, 11:47:27 AM »
I can't remember who it was that posted the CDS spreads before - on the old board - but if someone had access and was willing it would be appreciated!!

In the big picture, the swaps and hedges did their job with 2007 & 2008 results at record levels - did Prem close them out too early? Maybe. But FFH has loaded up on some ultra-safe, high yield munis backed by BRK, some global blue chips and 5 years from now Mr. Market will be looking at todays move into equities by FFH the same way they looked at the move into CDS - wishing that they had been that smart.  (unless of course it really is the end of the world!!)

cheers
Zorro   ;D