Credit Default Swaps

 

Today’s Originations links on the fourth quarter stock outlook, loan limit battle in Washington, and fallout from EU’s big decision. -Loan Limit Battle Looms In GOP House (WSJ Developments) -LATEST: Will Loan Limits Increase Again? (TheBasisPoint) -Why Greek CDS Market Is OK (FelixSalmon) -Fatal Flaw In Europe’s Rescue Plan (TheAtlantic) -Stocks Could Rally a Bit

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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

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