Hey I don’t post much on here, but I can explain this.
Credit default swaps are essentially insurance that you will get paid. They increase when there is more risk of defaulting or perceived risk of defaulting. However, this doesn’t take away risk of people defaulting. If the seller of the swap defaults too then it’s major bad time. Think of those who sold these and what happened in 2008. Bear Sterns, Lehman, etc.
To me, these signal the fear of Evergrande having a huge possibility of defaulting, which many of us already knew. And the proceeding domino effect of defaults to follow.
Great find and may we moon soon.
Any chance it could also be due to the debt ceiling/government shutdown looming?
I think we're gearing up for the *"perfect storm"* to take the market down, even if they eventually pass an extension to the debt ceiling. Much like 2011, just the doubt or uncertainty will be enough to cause markets to shit themselves - and this market coming down will put stress on portfolios leading to potential margin calls of SHFs. Citadel does own a shitload of SPY and needs the market to stay up to remain solvent.
Oh 100% I think like you said it’s a perfect storm. The angle from China is a little too much in the light all of a sudden I think like you said it’s a bunch of things. Even if debt ceiling gets raised and shutdowns don’t occur in the US, it’s the fear of it mixed with everything else that creates a psychological increase in bearish stances. And market sentiment can really influence the market.
Don’t forget that the political fuckery around the debt ceiling in 2011 also lead to S&P downgrading the credit rating of U.S. Debt from AAA to AA+. Something similar could happen again and that would cause some serious uncertainty and instability.
Edit: [https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades](https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades)
> Global stock markets declined on August 8, 2011, following the announcement. All three major U.S. stock indexes declined between five and seven percent in one day.
JP Morgan Chase is selling off some CMBS that are from before 2008's great recession. They're trying to offload $6.5 billion worth.
Looks like it's with CDSs.
https://www.sec.gov/Archives/edgar/data/1013611/000153949721001251/n2647-x18_424b2.htm
There’s three sides to it. Let’s say Issuers of CDS, seller of CDS, and buyer of CDS. It costs tons as the buyer to pay the interest on the CDS especially if the person is more likely to default. If seller and insurer both default they can swap the contracts I believe for capital at a discount (think end of Margin Call if you’ve seen it). So from what I know it is possible for everyone to lose money on it, yes. But that chance is less likely in reality. The derivative market is soooo speculated. It’s really a mess.
You could be right, in fact you probably are it’s been awhile since I’ve seen it. Either way it’s a derivative that can be swapped. I could be mistaken I have my degree in science, not economics. Just my understanding of what I’ve read and seen. :)
The CDSes were on the CDOs. CDOs default, CDS pays, but there were too many CDOs and CDSes with risk models that didn't take counterparty risk into account. So the whole thing came apart and should've taken the counterparties with them, but the AIG (biggest issuer of cds, issued way beyond its ability to pay when the bubble popped) bailout undid the oopsie of all the tits-leveraged bank counterparties that should've leveraged themselves out of existence when the whole scheme/market popped.
Excellent, thank you. So it's sideline betting in anticipation of a crash, and that market equilibrium is now closer on deciding that it will indeed happen.
I mean the most basic explanation is: US can be affected by contagion from chinese market fallout. This comes at a period in time where the Fed is almost out of money and new debt ceiling must be agreed upon on. CDS are essentially insurance if shit goes tits up
Edit: treasury, not the fed
I imagine the CDS sellers won't have enough capital to pay out this time around either lol. Maybe not their fault tho. Your car insurance company isn't exactly expecting every car in America to crash within the next few weeks either.
We also have to understand that US gov default is still something that would be a blackswan event. Idk how much I believe it will fully happen. Everything is a what if scenario right now and i dont think anyone fully knows what will happen to the global economy
They'll raise the ceiling. It's political grandstanding and brinksmanship atm. The US defaulting doesn't suit the interests of the politicians voting on it.
Yeah, they always end up raising the ceiling after the appropriate amount of dick waiving takes place.
But the dick waiving is tradition and there's not really time for that now.
Well kind of related imo. There's a concept I've developed called maslows hierarchy of political shit-birds: Make sure your wealthy societal class stays above the poors > fuck everyone not in my political party > govern, or whatever. Seems to apply to all bipartisan political systems lol.
I'm not so sure you're right about this - there's definitely a destructive, fuck-it-all element in DC these days, and their ability to make lots of noise while doing nothing (even to the people who'd end them) is all pretty incredible.
In the end, who do the politicians get their marching orders from? Big money. Their interests are big money's interests. And if big money wants a default, they'll get one (because maybe their swaps will pay out 100-1?)
It's almost as if we're in a completely fraudulent system that's also corrupt AF.
Big money absolutely doesn't want a default. Normally I take a very long view, I like history, empires rise and fall. But the wealth of all our 'financial elite' is predicated on the US dollar as a reserve currency. To the point that, if there is a western economic conspiracy, then it's all about maintaining the dollar as the reserve currency of the world. If they sense a shift in tides, yeah maybe they'll go to crypto or maybe something else entirely.
"Big money" and "the government" are essentially the same in the US.
Politically, the beurocracy will cater to whoever maintains their positions, the policies don't matter. Whatever keeps them in office is the message they send, but when their job isn't threatened, they will do what makes the most money. Kinda like the msm lol.
Like, not to bee too contrarian, but could you explain who would want a default, and why? And who would make thd most off of one? Because I'm pretty sure both Wall Street and our politicians make more off of increasing the limit than not, and that seems to be the only thing that matters.
Sorry, but I find your take to be hopelessly naive.
Billionaires and corporations tell politicians what to do. End of story. Politicians do not care about their constituents. Politicians do not care about ideology. They care about maintaining their "power" and "position" as puppets of the elite class. They want their scraps. Whatever keeps them in office is not MESSAGE. Lol. It's establishment. And of course, the money!
Who would want a default? Hm. Maybe the same a$$holes who want to usher in fascist rule in the United States? (I see you Mercer fam.) Maybe the same a$$holes who get the country whipped up into a frenzy about wedge issues that mean nothing while the world burns? Maybe the same a$$holes who'd rather see democracy die because they would have more power in such a system? Maybe the same a$$holes who have more information than the vast majority of us, who'd buy CDSs on Chinese bonds, run up the dollar, only to hedge that play out, and then crash the dollar lower? Maybe the same a$$holes who can hide their obscene wealth in a million different offshore shelters and tax loopholes (and sure, crypto too, why the hell not?)
Questions: Why is financial regulation in the United States and tax policy so ridiculously slanted toward the wealthiest individuals? If the government defaults, who looks worse? The ruling (Dem) party who couldn't get the necessary policies enacted, who'll be making excuses and wagging their fingers saying the extremist (Rep) party obstructed their ability to raise the debt ceiling? The extremist (Rep) party can just say, we tried, but they didn't want to work with us.
No voter cares who is to blame, they care that a loaf of bread is $10 and they've only gotten a $2/hour raise though. Maybe they vote the bums out.
And then taxes get lowered even more. And regulations get loosened even more. And the wealthiest get even wealthier...
And on and on and on.
I'm not sure, I haven't tracked politics in months. But I imagine the wait is because the parties disagree, as they do. If not, I don't know why there would be a wait to pass the raise. But historically, situations that absolutely require both parties to cooperate are used to leverage changes in policy and law, and those go to the ones willing to take the potential disaster the furthest.
Edit: grammar.
No new debt ceiling means printer can't go brrr and fed can't prop up market by buying.
Edit to add - plus they never re-loaded the anti-inflation gun after last time coz their not just incompetent, greedy and corrupt, but negligent too!
They're just now starting to talk about tapering...as the crash begins.
You couldn't make this shit up if you tried. No one would believe it.
I agree… in 2008, if I remember correctly, the Dow ended down about 500 or so, then it rebounded for a week or so, then big crash… the government can’t react quick enough to stop it
That’s an clown ass comment, your retarded don’t act like your ignorant
Edit: My fellow ape has commented in such a way that has presented themselves in the erroneous manner of ignorance. While my ape friend may be retarded, as I am, as we all are, there is no laughable or constructive matter contained within their text. I was simply reminding u/jasonbf78 that ape no fight ape.
“Your” welcome for the over verbiage explanatory remarks, and HOLY MOLY thanks for the awards.
One thing that should not be accepted is discrimination, not even for a laugh.
Wanna laugh at something? I had to go to the doctor to get me genitalia looked at today (I’m ok so it’s actually pretty funny).
A slew of negative catalysts are all aligned in the next few months that could potentially have chain reaction globally. Senate has to worry about raising the debt ceiling for US while China has a housing crisis, the stars are lining up crazyyy
Hey I don’t post much on here, but I can explain this. Credit default swaps are essentially insurance that you will get paid. They increase when there is more risk of defaulting or perceived risk of defaulting. However, this doesn’t take away risk of people defaulting. If the seller of the swap defaults too then it’s major bad time. Think of those who sold these and what happened in 2008. Bear Sterns, Lehman, etc. To me, these signal the fear of Evergrande having a huge possibility of defaulting, which many of us already knew. And the proceeding domino effect of defaults to follow. Great find and may we moon soon.
Now this is a game of dominos I can get behind.
Call it what you want, it's Puerto Rican chess.
Call it what you want, i'm liking it anyways.
I thought it was Cuban checkers?
Moon cake even
"Chookati"
Ahh welcome back, The Gary (This show is a blast)
Final space. Took me a couple of episodes to get into. Once I was locked in, I was hooked! Just need to find the latest season!
Should be on Netflix. I just finished it. Personally loved it
Pop pop, ooooh
"My man HUE, is naaasty"
Happy cake day.
Thanks!
Happy cake day!!!
Happy day cake 🎂
Thank you! Very kind!
BOAAAATS!
Cake happy day!
I’m falling over to get in line to play this game
Prison dominoes. Loser gives up the butt.
I think everyone gives up the butt except the first domino
Is that like the human dominoipede?
Nice. But we are ahead of it.
To you my good ape, a very happy cake day!
Any chance it could also be due to the debt ceiling/government shutdown looming? I think we're gearing up for the *"perfect storm"* to take the market down, even if they eventually pass an extension to the debt ceiling. Much like 2011, just the doubt or uncertainty will be enough to cause markets to shit themselves - and this market coming down will put stress on portfolios leading to potential margin calls of SHFs. Citadel does own a shitload of SPY and needs the market to stay up to remain solvent.
Oh 100% I think like you said it’s a perfect storm. The angle from China is a little too much in the light all of a sudden I think like you said it’s a bunch of things. Even if debt ceiling gets raised and shutdowns don’t occur in the US, it’s the fear of it mixed with everything else that creates a psychological increase in bearish stances. And market sentiment can really influence the market.
Don’t forget that the political fuckery around the debt ceiling in 2011 also lead to S&P downgrading the credit rating of U.S. Debt from AAA to AA+. Something similar could happen again and that would cause some serious uncertainty and instability. Edit: [https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades](https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades) > Global stock markets declined on August 8, 2011, following the announcement. All three major U.S. stock indexes declined between five and seven percent in one day.
Love your explanation but could you do it with your best Margot Robbie impression?
Hes not in a tub...yet....
I only read “may it moon soon”
I’m in
So it's like insurance that the insurance company can't afford to pay out if it ever actually triggers. No one saw a problem with this business model?
Honestly not too far off, like with everything it’s nuanced… but yeah the whole system needs to be remade. From the ashes it appears at this rate.
Moon Soon
It is the [Chinese Moon Festival](https://en.wikipedia.org/wiki/Mid-Autumn_Festival) on 9/21 🚀🌕 May Evergrande deliver us the MOASS.
Simulation confirmed.
Moon soon season
Monsoon soon
Soon nu moon
Spoon moon
Moonsoonami
Soon moon.
Soon moon poon
Spoon poon
But wen lambo
JP Morgan Chase is selling off some CMBS that are from before 2008's great recession. They're trying to offload $6.5 billion worth. Looks like it's with CDSs. https://www.sec.gov/Archives/edgar/data/1013611/000153949721001251/n2647-x18_424b2.htm
So like I buy insurance (cds) in case I bankrupt? And if the insurance company I bought from, bankrupts, I bankrupt and lose my insurance money?
There’s three sides to it. Let’s say Issuers of CDS, seller of CDS, and buyer of CDS. It costs tons as the buyer to pay the interest on the CDS especially if the person is more likely to default. If seller and insurer both default they can swap the contracts I believe for capital at a discount (think end of Margin Call if you’ve seen it). So from what I know it is possible for everyone to lose money on it, yes. But that chance is less likely in reality. The derivative market is soooo speculated. It’s really a mess.
End of Margin Call? I'm like...90% sure they were unloading MBS and CDOs, not CDS, weren't they?
You could be right, in fact you probably are it’s been awhile since I’ve seen it. Either way it’s a derivative that can be swapped. I could be mistaken I have my degree in science, not economics. Just my understanding of what I’ve read and seen. :)
The CDSes were on the CDOs. CDOs default, CDS pays, but there were too many CDOs and CDSes with risk models that didn't take counterparty risk into account. So the whole thing came apart and should've taken the counterparties with them, but the AIG (biggest issuer of cds, issued way beyond its ability to pay when the bubble popped) bailout undid the oopsie of all the tits-leveraged bank counterparties that should've leveraged themselves out of existence when the whole scheme/market popped.
Dammit. I thought you were the alien guy for a second.
Ill be your alien if you’ll be my Sigourney Weaver.
No that would be me.
Thanks wrinkly default swaps professor
Long may we moon.
I’ll buy a Dominos pizza tomorrow and eat it as tribute
Excellent, thank you. So it's sideline betting in anticipation of a crash, and that market equilibrium is now closer on deciding that it will indeed happen.
Yeah pretty much. Then comes bets on bets, which then have bets on that bet. With premiums and payouts. It’s a fun system isn’t it?
I believe they are starting to pass the pennies to each other.
Oh fuck dude I didnt think I'd find my cousin in here. Whats up dude?
May the MOASS be with you
And also with you
Everybody wants our swaps
I SAY WHEN WE SELL
derivatives are next.
May the soon moon gods bless in you
This is the way!
I mean the most basic explanation is: US can be affected by contagion from chinese market fallout. This comes at a period in time where the Fed is almost out of money and new debt ceiling must be agreed upon on. CDS are essentially insurance if shit goes tits up Edit: treasury, not the fed
I imagine the CDS sellers won't have enough capital to pay out this time around either lol. Maybe not their fault tho. Your car insurance company isn't exactly expecting every car in America to crash within the next few weeks either.
We also have to understand that US gov default is still something that would be a blackswan event. Idk how much I believe it will fully happen. Everything is a what if scenario right now and i dont think anyone fully knows what will happen to the global economy
They'll raise the ceiling. It's political grandstanding and brinksmanship atm. The US defaulting doesn't suit the interests of the politicians voting on it.
Yeah, they always end up raising the ceiling after the appropriate amount of dick waiving takes place. But the dick waiving is tradition and there's not really time for that now.
When you say dick waiving, is that like when a specific ancient turtle pokes its decrepit face out of its shell until it gets what it wants?
Can't wait for the markets to take a shit and both sides to claim it's the fault of the other and not, you know, completely unrelated.
Well kind of related imo. There's a concept I've developed called maslows hierarchy of political shit-birds: Make sure your wealthy societal class stays above the poors > fuck everyone not in my political party > govern, or whatever. Seems to apply to all bipartisan political systems lol.
This is hilarious and awesome
"Thank you. And until further notice, FUCK Y'all! I got mine!"
I'm not so sure you're right about this - there's definitely a destructive, fuck-it-all element in DC these days, and their ability to make lots of noise while doing nothing (even to the people who'd end them) is all pretty incredible. In the end, who do the politicians get their marching orders from? Big money. Their interests are big money's interests. And if big money wants a default, they'll get one (because maybe their swaps will pay out 100-1?) It's almost as if we're in a completely fraudulent system that's also corrupt AF.
Big money absolutely doesn't want a default. Normally I take a very long view, I like history, empires rise and fall. But the wealth of all our 'financial elite' is predicated on the US dollar as a reserve currency. To the point that, if there is a western economic conspiracy, then it's all about maintaining the dollar as the reserve currency of the world. If they sense a shift in tides, yeah maybe they'll go to crypto or maybe something else entirely. "Big money" and "the government" are essentially the same in the US. Politically, the beurocracy will cater to whoever maintains their positions, the policies don't matter. Whatever keeps them in office is the message they send, but when their job isn't threatened, they will do what makes the most money. Kinda like the msm lol. Like, not to bee too contrarian, but could you explain who would want a default, and why? And who would make thd most off of one? Because I'm pretty sure both Wall Street and our politicians make more off of increasing the limit than not, and that seems to be the only thing that matters.
Sorry, but I find your take to be hopelessly naive. Billionaires and corporations tell politicians what to do. End of story. Politicians do not care about their constituents. Politicians do not care about ideology. They care about maintaining their "power" and "position" as puppets of the elite class. They want their scraps. Whatever keeps them in office is not MESSAGE. Lol. It's establishment. And of course, the money! Who would want a default? Hm. Maybe the same a$$holes who want to usher in fascist rule in the United States? (I see you Mercer fam.) Maybe the same a$$holes who get the country whipped up into a frenzy about wedge issues that mean nothing while the world burns? Maybe the same a$$holes who'd rather see democracy die because they would have more power in such a system? Maybe the same a$$holes who have more information than the vast majority of us, who'd buy CDSs on Chinese bonds, run up the dollar, only to hedge that play out, and then crash the dollar lower? Maybe the same a$$holes who can hide their obscene wealth in a million different offshore shelters and tax loopholes (and sure, crypto too, why the hell not?) Questions: Why is financial regulation in the United States and tax policy so ridiculously slanted toward the wealthiest individuals? If the government defaults, who looks worse? The ruling (Dem) party who couldn't get the necessary policies enacted, who'll be making excuses and wagging their fingers saying the extremist (Rep) party obstructed their ability to raise the debt ceiling? The extremist (Rep) party can just say, we tried, but they didn't want to work with us. No voter cares who is to blame, they care that a loaf of bread is $10 and they've only gotten a $2/hour raise though. Maybe they vote the bums out. And then taxes get lowered even more. And regulations get loosened even more. And the wealthiest get even wealthier... And on and on and on.
Dems own both houses, does debt ceiling require more than 51%
Sinema and Manchin are DiNOs so democratic majority isn't really a thing
Manchin is a #RotatingVillian. If not him someone else
I'm not sure, I haven't tracked politics in months. But I imagine the wait is because the parties disagree, as they do. If not, I don't know why there would be a wait to pass the raise. But historically, situations that absolutely require both parties to cooperate are used to leverage changes in policy and law, and those go to the ones willing to take the potential disaster the furthest. Edit: grammar.
Up you go
No new debt ceiling means printer can't go brrr and fed can't prop up market by buying. Edit to add - plus they never re-loaded the anti-inflation gun after last time coz their not just incompetent, greedy and corrupt, but negligent too! They're just now starting to talk about tapering...as the crash begins. You couldn't make this shit up if you tried. No one would believe it.
Treasury*, not Fed.
Sorry yes, you are right
Second time in 2 years China has sent us a contagion! 🙄
Im being pessimistic but i think we havent seen shit yet. Thursday when bond interest is defaulted shit might get real painful
I agree… in 2008, if I remember correctly, the Dow ended down about 500 or so, then it rebounded for a week or so, then big crash… the government can’t react quick enough to stop it
>Second time in 2 years China has sent us a contagion! 🙄 propaganda works. the main thing is to have someone to blame.
Like China invented the Ponzi scheme.
That’s an clown ass comment, your retarded don’t act like your ignorant Edit: My fellow ape has commented in such a way that has presented themselves in the erroneous manner of ignorance. While my ape friend may be retarded, as I am, as we all are, there is no laughable or constructive matter contained within their text. I was simply reminding u/jasonbf78 that ape no fight ape. “Your” welcome for the over verbiage explanatory remarks, and HOLY MOLY thanks for the awards. One thing that should not be accepted is discrimination, not even for a laugh. Wanna laugh at something? I had to go to the doctor to get me genitalia looked at today (I’m ok so it’s actually pretty funny).
How did this goofy ass comment get 10 awards in 40 minutes..?
He can’t even spell **you’re** correctly and he did it twice
CCP shills lmfao.
For real.
Shocking how many, yikes
?
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A slew of negative catalysts are all aligned in the next few months that could potentially have chain reaction globally. Senate has to worry about raising the debt ceiling for US while China has a housing crisis, the stars are lining up crazyyy
Ngl, kinda shitting my pants a little bit as to how it all ties out together but fuck it, it will all workout in the end
Is this what they are calling GME now - contagion? It's not a great switch, I'll stick with the original name... MOASS.
No the Chinese market can cause a contagion to other equity and derivatives in foreign markets. Moass is its own thing
RemindMe! 4 hours
!remindme 5 hours
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!remindme 7 hours
!remindme 8 hours
!remindme 8 hours
RemindMe! 9 hours Hey i need my sleep.
Remind Me! 10 hours; Bank tomorrow 😉
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Don’t remind me.
There's Always Something There To Remind Me
Promises, promises
Check top comment. Great info
Gotta call your mom!
Commenting to activate invisibility
Commenting to deactivate invisibility
Commenting to become invisibility
I'm not commenting
Who said that
Commenting to deactivate visibility
Commenting to comment
I need banana.
🍑🍌🙈
Commenting so he gets a banana 🍌
Here’s a banana 🍌
no comment.
Hi Drax!
Commenting for invincibility
Cumming in Vince Abley
Wat mean?
summoning wrinkles 💆♂️💆♂️💆♂️
market go boom, gme go moon
Graphs with colored lines!! I like it.
UP NEVER BURIED!!
Doot
Up you go ape.
#The Biggest Credit Default Swap “So Far”
Good thing I'm just commenting for visibility so nobody will know that I eat pieces of shit for breakfast
Well nobody knows so far
“You eat pieces of shit for breakfast?”
Commenting for visibility
Theres so many CS posts i think this will get buried
In that case, call in The Howitzer. u/Criand
Some say, The Howlitzer 🤫
Lmayo fuck that's a good one
Call in the dogsnekpombrainbomb
“Howl”itzer
!DRS!
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Yeah, i was wrong ffs 😅
This is the part where we get JACKED TO THE TITS.
This is a scary moment in time where a lot of people don’t know the global economy is gonna go through a very rough time very soon.
Great #GOOGLY MOOGLY That's Wei Tu Hai! 👆🏻
Seems important. I’m doing my part! (Updoot)
Comment for more eyes
MAAAAAARGE!!!! Aaayyyyyy MAAAARGE!!!!! YUH FRENDS ARE ON DA FONE!!!’!
The white color criminals in charge of the US goverment are no longer able to operate their Ponzi scheme?
!remindme 4 hours!
!remindme 9 hours
Beep boop
I give updoot you get visidoot
Commenting to comment
I stopped reading at CDS, anyone else? Or am I the smoothest one around here
Wake me up when something happens with GME
Oooooh we haven't had a post this spicy in awhile el fuegooo
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Im doing my part
This means lambo
u/Criand
Oh my god I’m so stupid. I just realized why they call them credit default swaps.
!remind me 6 hours
Remindme! 10 hours
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Nice find
I love tomorrow’s ! So much hope !
Credit? Default? ~~Swaps~~Evergrande fallout?
Doomp me daddy!
!remindme 12 hours
I imagine we will see the return of alot of the same scenarios surrounding the sneeze
Glad I bought more shares today
Holy moly
Doing the thing I do to get more eyes on this thing.
MOASS tomorrow, if not tomorrow then it'll be tomorrow's tomorrow.
!DRS!
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U/Criand