Derivatives

Must-Read Post: European CDS Primer

Edward Harrison of CreditWritedowns was all over the EU announcement today, and ended the day with a post about how the “voluntary” 50% writedown on Greek debt by banks skirts a default. Which means that investors who bought credit default swaps (CDS)—insurance where investors get paid in the event of a default—don’t get paid. Net

PrimeX Primer: How MBS Trading Impacts Consumer Mortgage Rates

At the end of last week a leading Wall Street researcher wrote, “The general tone at ABS East was somewhat gloomy, however most participants view the non-agency sector relatively attractive versus other sectors. The market has seen a recent drop in PrimeX prices, and it is important to understand the collateral underlying in the Prime