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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Credit Default Swaps for Doomers, Politicians and the Media |
Seeking Alpha - June 24, 2011 - By Peter Tchir
About the only thing that the doom and gloom crowd, the politicians and the media all agree on is that credit derivatives are evil, unnecessary, "financial weapons of mass destruction." With the European sovereign debt crisis escalating, the Credit Default Swaps (CDS) market has once again become a topic of conversation. Many of the issues related to CDS that are discussed are old, misleading, or plain wrong. Here is my attempt to address some of the issues that come up most whenever CDS is mentioned:
Credit Events
Exposures
Counterparty Risk
Transparency
These are topics that need to be understood in order for investors to make informed decisions. I am not here to defend CDS as a product, but to try and shed light on the subject so that people don't react to inaccuracies that cause them to make decisions based on incorrect information. Since so many journalists still feel that the investing public needs to see the boilerplate language "when yields go up, bonds prices, which move in the opposite direction, go down" this may be an uphill struggle. But here is my attempt.
Credit Events Are Very Confusing
Investors who trade CDS generate P&L predominantly from being right or wrong on the direction of spreads on a particular contract. In addition, a credit protection seller receives an upfront payment and carry income. This is very similar to bond investors. The difference is that CDS counterparties put up initial margin (which commonly ***% of the notional) and post variation margin vs. bond investors who pay purchase price but likely repos the bond to fund that purchase price.
A credit event effectively terminates a CDS contract and locks in a gain for the Buyer of Protection and locks in a loss for the Seller of Protection. CDS contracts have value prior to a credit event and trade regularly and have a mark to market value. You do not need a credit event for a CDS to have value, but if there is no credit event during the life of the contract, then the CDS will expire worthless. If there is a credit event (as determined by the ISDA Credit Derivatives Determinations Committees) then the credit event settlement protocol is followed.
For the complete article.
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Income Security Recommendation January 2013 Issue.
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