More about the Lehman $360 billion CDS auction tomorrow (which apparently triggered today's panic)

[Roland99]

CNBC contributor David Kotok stating the hoarding of cash to cover the Lehman CDS auction tomorrow will be over then and the uncertainty will be gone from the markets re: this event and things should stabilize. Someone else mentioning LIBOR will stabilize and drop and credit will open up things can begin to recover.

But...this can't be the only expiration of CDS contracts now or soon, eh?

[whistle]

1. You sure about that...check out the commentary at the link

http://www.youtube.com/user/ubseconomics

[Roland99]

2. Not sure how much water that holds...watched that earlier. Dude sounds rather cocky, eh?

This is something that *is* happening tomorrow (the auction)

[whistle]

3. Considering UBS is bankrupt and taking in bailout funds like a blackhole

...the way to stopt it is put the banks into receivership, freeze all funds, stop paying all gambling claims, recalculate the balance sheets with the remaining assets and debts outstanding and build from there.

UBS and all their derivatives claims should be flushed from the financial system like one huge BRITISH TURD!

[Roland99]

4. But it's more than UBS. The entire derivatives market was valued at, what, $500-600 trillion?

Yes...$516 Trillion:

http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/story.aspx?guid=%7BB9E54A5D-4796-4D0D-AC9E-D9124B59D436%7D

[whistle]

5. Well, absolutely correct, so what happens when there are 100 or a 1,000

...or 100,000 UBS-es claiming the same tiny base of mortgages? It is a classic bank run on a MACRO scale

The more these derivatives are traded, which they have been and still the greater the exponential scale of claims.

That $500 to $600 trillion was last December and it has grown now into a quadrillion number or 1 followed by 15 zeros!

It is impossible to pay it and it is out of control as the derivatives are being dumped on suckers.

http://www.youtube.com/user/ubseconomics

[Darkhawk32]

6. Odds on this causing a snowball effect with the CDS's? n/t

[Roland99]

7. I don't think anyone really has any idea.

[rockymountaindem]

8. I have no idea about most of this but I'm willing to believe anything at this point

If someone told me we'll be at 2000 by the end of the year, I'd say they've got as much chance of being right as saying we'll be at 12000. I don't think I can take much more of this myself though.

[Roland99]

9. My biggest worry is the potential for substantial job losses in the near future.

[Pale Blue Dot]

10. This may be right, but CNBC is HARDLY a trusted source.

They've been wrong about everything so far.

[Roland99]

11. Not all of their contributors are "in the tank" for a bull market.

Most think it's a bargain buying period but there are a few still sounding alarms.

[Roland99]

12. Wish C-SPAN was covering this event live!

[Roland99]

13. Here's the timeline for today's events >>>>

9:45 a.m.-10 a.m. Auction participants will submit bids and offers for the debt backing the credit default swaps, which will be used to determine the initial recovery rate of the swaps.

10:30 a.m. Auction administrators Creditex and Markit will publish the initial recovery price and the open interest for the contracts will be published. The open interest reflects the amount of bids and offers that have been made, and will show if there are more buyers than sellers, or vice versa.

12:45 p.m. -1 p.m. Participating dealers will submit limit orders for the debt on behalf of themselves and their clients to fill the open interest

2 p.m. The final price of the auction will be published.




Should be hearing something soon.

[Roland99]

14. Update >>>>

Due to the large open interest, the secondary bidding period for the Lehman auction opened a few minutes early, and is to be extended to 1:30pm. Final results will be published at 2pm as expected.

[Kurt_and_Hunter]

15. Rumoured to be about 9.5% of face value (They had been talking 12-13%)