Mommy Hey just wants to say I also really appreciate this post. Most of the mouth breathers on this sub-post whatever articles they read 5 minutes ago on google news and call it due diligence. It’s awesome to see someone actually knowledgeable posting here. I took an Autism Behind Every Great Autistic Boy Who Believes In Himself Is A Mommy Who Believed In Him First Shirt. From the professor giving a very cursory overview of what they were and when firms might use them. I learned a lot in this single post and hope you keep adding more content! Thanks, buddy. This is the shit that brought me in here a couple of years ago, and the reason I stay. I appreciate you taking the time to put this into words.
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Consider Bombardier. 15 thousand mechanics/engineers/etc on furlough (leave with pay) As opposed to $PLAY staff who got simply punted. There is something I don’t understand in the last paragraph though, in point 1. If an investor is long the debt, if he wants to hedge it, he Autism Behind Every Great Autistic Boy Who Believes In Himself Is A Mommy Who Believed In Him First Shirt? What am I missing? After a reread, I think I understood, you meant instead of being long debt. They are selling the CDS now since they don’t buy the debt fewer buyers, downward pressure. Another question, how can basis trader take leverage? do they buy more CDS than debt, only hedging partially? From my understanding, they would be looking at credit premium on the debt and comparing it to the fixed spread on CDS leg.
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If they think the CDS spread is lower than the credit risk, they would go long the spread and the debt. So leverage would come simply from estimating the CDS spread. And buy it or shorting it, depending on the credit spread of the bond? All those CDS use made then banks and institutions too much tied. So then every instability on an actor had a wide effect on the remaining of the market thus creating systemic risk. That’s what we saw in 08 and start seeing it more and more since then at the first little trouble on the market. Here’s how someone doing a bond basis takes leverage. Then it’s really a nice shirt for all men and women. So you should buy this shirt.
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