Wells Fargo to Boost Credit Default Swaps as Trading Rises

Well, any financial experts out there??

Wells Fargo to Boost Credit Default Swaps as Trading Rises

CDS is a derivative contract that allows an investor to place a bet on whether a company or country will default on its debt within a fixed time period. Basically, it serves as protection against the credit risk stemming from holding the debt instrument.

FYI

According to the Depository Trust & Clearing Corporation, the current outstanding gross notional for all single name CDS is around $6.8 trillion compared with $14.8 trillion at the end of 2008. Though the figure reflects a substantial decline, a gradual revival seems to be lurking around.

While Wells Fargo should benefit from its potential move, this also may induce other banks to take similar efforts.

However, nowhere near 2008 levels... what does this tell us about the future of the market?

Good time to buy into real estate or maybe we should give the market a little more time to adjust?

Does this move tell us anything and will the trend continue or nothing to see here?

a reply to: onequestion

I think it would help to know if the Federal Reserve intends on raising rates to more historical reflective levels. This would drive the housing market to grow which would then increase the value of real estate.

most of the too big to fail banks are bigger than they were pre-crisis

trump wants to repeal dodd-frank

the next time this happens and there are warnings given, I am moving everything to cash until the crisis and then buying right back in like buffet does

a reply to: AugustusMasonicus

But how can the Fed raise rates with such low numbers in the labor force and weak jobs reports two months in a row

a reply to: syrinx high priest

From my understanding Dodd Frank is bad for small business good for big business

originally posted by: onequestion
But how can the Fed raise rates with such low numbers in the labor force and weak jobs reports two months in a row

Think of the prime rate as a 'emergency fund', the Federal Reserve can lower the rate to stimulate the economy (theoretically) but when the rate is so low that lowering further is not possible or will have little impact it is basically irrelevant. The rates should have been gradually raised ever since 2008 to build up this safety net, it is one of the reasons the housing market has been slow to recover. There is sluggish demand as no one feels compelled to move their assets to real estate since they feel they can still get it on the cheap with low rates for the foreseeable future.

a reply to: AugustusMasonicus

Yeah but the Fed doesn't raise interests rates that'll hit the real estate market hard.

Won't that effect all this new subprime lending and I influence the markets on a large fee scale

originally posted by: onequestion
Yeah but the Fed doesn't raise interests rates that'll hit the real estate market hard.

Every quarter point has some influence. What they need to do is announce that there will be an ongoing and gradual increase over the next few years. That would immediately impact the real estate market. This would also drive the secondary markets up as it filters into the broader economy.

a reply to: onequestion

Credit Default Swaps should be outlawed
It is what brought the country to its knees in 2008.
Some still try and blame it on the CRA which is load of hogwash since the crisis was global as well when they were selling these instruments like hot cakes everywhere.

Brooksley Born tried to regulate derivatives and the bankers stormed DC and told her who was boss.

The Big Short is a good movie I recommend and at the end of the movie, they make a good point.
They always try and blame the poor and politically disconnected when it was all done by Bankers and their puppet politicians.

a reply to: AugustusMasonicus

I was reading a week or so ago about one of the big banks (I think it was BoFA) offering ridiculously low mortgage rates and to people with bad credit. It does feel a little like 2007 again.

the good old boys stuck a new provision in back in 2009 to keep the bank bailouts from being so public next time the global fundamentals get wild. it was kind of sneaky.....they have a built in buffer now.......that's for the too big to let fail sector

this cds seems to be the for the next level down.....maybe...?

personally I think we're ok for 60 more years......according to the 70 year cycle of the big boys crashing the economy then buying up for pennies......1790.....1867.....1934.....2008.....the fed rates.....talk on the street is a raise in the rates.....but not in my view....poor lady Yellin....she deserves better, huh!!!

best just trade the gbp/jpy short term....and toy with oil ....a blast when London ping pongs the price back and forth for like hours...

a reply to: onequestion

The Big Short can be seen at Amazon.com

Based on the true story of four outsiders who saw what the big banks, media and government refused to: the global collapse of the economy. A bold investment leads them into the dark underbelly of banking, where everyone and everything is in question.

moneymorning.com...

The Real Reason for the Global Financial Crisis…the Story No One's Talking About

I also recommend seeing The Warning from Frontline which is free.
www.pbs.org...


As far back as the 1990's well before the financial crisis, Brooksley Born tried to regulate derivatives and the Bankers with their puppet Summers told her to stop because she would cause the "Greatest Economic Disaster" since the great depression if she was allowed to do that.....

Which tells us that the bankers and politicians knew they were playing with fire and the results of 2008 was intentional

originally posted by: Kali74
I was reading a week or so ago about one of the big banks (I think it was BoFA) offering ridiculously low mortgage rates and to people with bad credit. It does feel a little like 2007 again.

I saw something similar.

We are still very much in danger as the largest offenders from 2008, Freddie and Fannie, are still a disaster. Coupled with the big banks having gotten bigger while squeezing the locals, the formula is still there for a financial meltdown.

a reply to: AugustusMasonicus

They all got away with it for the most part too. Absolutely disgusting. Neither Hillary nor Trump will do anything about it either, in fact both will act to shield the financial sector.

originally posted by: AugustusMasonicus
a reply to: onequestion

I think it would help to know if the Federal Reserve intends on raising rates to more historical reflective levels. This would drive the housing market to grow which would then increase the value of real estate.

The value of real estate in this country is already overpriced.
The historical rule has always been that you should pay no more than 2X your annual income for a house, and there are graphs depicting that historically at the national level, until the bankers and globalists got in the game.

Now Americans in their own country are having to compete with foreigners and bankers buying houses or allowing them to sit in order to artificially keep prices high.

Wages have stagnated for most Americans so prices should be dropping not rising.

jacobe001....it's true she would have sunk the globe if she got into the new derivative scheme....that's the computer enabling more trades.....thus more stability for a short while....that short while was over yesterday.....

we went off the gold standard completely and had only 11 years or so till meltdown....the computer fixed that...enabling complex stupid derivatives to be created and traded....God must be watching ...huh!!

originally posted by: onequestion
a reply to: syrinx high priest

From my understanding Dodd Frank is bad for small business good for big business

That was intentional since Big Business owns the government.
The majority of big business in this country writes the rules and regulations to pass off to their puppet politicians.

The first fix in this country should be throwing Big Business and Banking out of our government

a reply to: AugustusMasonicus

I've read many times that we've only experienced half of the market crash, it has the brakes put on it with the bailouts.

originally posted by: onequestion
a reply to: AugustusMasonicus

I've read many times that we've only experienced half of the market crash, it has the brakes put on it with the bailouts.

Dodd Frank was a gift to the To Big to Fail because rather than expect Bail Outs in the future, they will do a Bail In, instead wherein they steal their depositors money so they can keep playing their corrupt games.

infinitebanking.org...

I know a lot of people that have moved their money to credit unions but apparently not enough have done so.
The Big Banks need to be shutdown.

originally posted by: Kali74
Neither Hillary nor Trump will do anything about it either, in fact both will act to shield the financial sector.

While I am not a Trump supporter he did rightly recognize the necessity of repealing or reworking Dodd-Frank which has directly lead to the big banks getting bigger.