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Lehmans

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Comments

  • Woby_Tide
    Woby_Tide Posts: 5,344 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    In the case of Lehman, setting a price for the debt at 8.625 cents for every $1 now means any company that sold swaps tied to Lehman debt theoretically must pay out the remaining 91.375 cents for every $1 on the contracts.
    http://biz.yahoo.com/ap/081010/lehman_credit_defaults.html?.v=4

    So 91% roughly
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    posh*spice wrote: »
    Day Of Reckoning
    http://www.bbc.co.uk/blogs/thereporters/robertpeston/

    Robert Peston's take on todays default swaps.

    Lehmans cash settlements took place yesterday.
    It all seems that there were no big issues as there was no counterparty unable to pay.

    Peston accurate again? or was he just trying to 'scare' viewers!!

    is he a journalist or an entertainer?
  • posh*spice
    posh*spice Posts: 1,398 Forumite
    chucky wrote: »
    Lehmans cash settlements took place yesterday.
    It all seems that there were no big issues as there was no counterparty unable to pay.

    Peston accurate again? or was he just trying to 'scare' viewers!!

    is he a journalist or an entertainer?

    I stand corrected;):D and suitably chastised
    Turn your face to the sun and the shadows fall behind you.
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    the post wasn't to have a pop at you - was just to make a comment about Rob Peston... :)
  • posh*spice
    posh*spice Posts: 1,398 Forumite
    chucky wrote: »
    the post wasn't to have a pop at you - was just to make a comment about Rob Peston... :)

    That's OK - I wouldn't have minded even if it was:D. Always happy to be in-the-wrong, I come here to learn;)
    Turn your face to the sun and the shadows fall behind you.
  • baby_boomer
    baby_boomer Posts: 3,883 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    But the markets may only know the full effects when the institutions that have paid up, re the Lehman's swaps, reveal their next sets of figures.

    It's nevertheless a good event to have got out of the way, and may calm a few nerves.
  • poppy10_2
    poppy10_2 Posts: 6,597 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Lehman Debt Swaps Settled for $5.2 Billion

    Sellers of insurance on Lehman Brothers debt made net payments of $5.2 billion to settle an estimated $400 billion or more in credit default swaps, the Depository Trust and Clearing Corporation said Wednesday.

    “The portion of this net funds settlement allocable to trades between major dealers was settled through the normal settlement procedures of CLS Bank (the world’s central settlement bank for foreign exchange, and the central settlement provider to the Warehouse) for Tuesday, Oct. 21, without incident,” Depository Trust, the main clearing house for these swaps, said in a statement.
    poppy10
  • GDB2222
    GDB2222 Posts: 26,825 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    poppy10 wrote: »
    Lehman Debt Swaps Settled for $5.2 Billion

    Sellers of insurance on Lehman Brothers debt made net payments of $5.2 billion to settle an estimated $400 billion or more in credit default swaps, the Depository Trust and Clearing Corporation said Wednesday.

    So, alll these institutions traded between themselves, and paid themselves commissions and bonuses, on $400 billion face value of CDSs, when in fact the net position was just $5 billion? Have I understood that correctly? :T
    No reliance should be placed on the above! Absolutely none, do you hear?
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    yes you have - the risk on all these CDS trades was spread amongst banks or whoever would take that risk.

    one trade would be re-traded over and over again between banks each taking a spread (profit) on the market price at the time.

    these trades would not have happened together but over time maybe 4 or 5 years.
  • sabretoothtigger
    sabretoothtigger Posts: 10,036 Forumite
    Part of the Furniture 10,000 Posts Photogenic Combo Breaker
    So in theory does that mean at its most extreme one company profited by 5bn while one had to pay up
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