Archive for November, 2013

In the final part of this learning series, we explore Credit Default Swaps. The best way to understand these instruments is to equate them to insurance policies, for bonds and their risk of defaulting.

This post will cover topics related to what is and how a CDS works, CDS Indicies, Total Rate of Return Swaps and Exoctic CDS’s

Any feedback on this series is welcome


CDS Indexes

Exoctic CDS

Part 3 of 4, this week we look at the subject of how assets are used to create revenue streams, the process known as securitization. We also explore the field of so called exoctic instruments, looking at CDO/CFO/CLO product types.

This is another opportunity to understand the way instruments are structured in order to sell them on in a different legal form (re-packaged) for the purpose of achieving certain investor requirements of risk and return

Asset Backed Securities

Exoctic CDOs

In this second part of the LEARN: CREDIT PRODUCTS series, we will explore the topic of Synthetic CDOs, what they are and how they work, including their different uses and types.

As a general backdrop, it is worthwhile understanding ‘synthetic’ products, by their nature, they seek to replicate the properties of an underlying investment and therefore allow the investor to profit (or loose) without actually holding a position in a ‘real’ asset. Just one of the many concepts and varieties that allow the kind of financial alchemy that exists today – meaning anything can be CREATED as needed….(hence islamic fraud/finance)

Synth CDO