With Friends Like This….

It’s one thing to get criticized by those who don’t understand or like the financial markets. It’s another when the criticism comes from someone who does. A recent Forbes op/ed is clearly in the latter camp. It’s unfortunate and disappointing that it is based on an outdated, inaccurate view of the CDS market.

Contrary to the article’s assertions, CDS trading volumes are publicly available, via the DTCC Trade Information Warehouse. This and other trading information has been available for some time and levels of activity in the CDS market are no surprise to financial market professionals.

In addition, market participants have long maintained that CDS prices should be viewed in context. They are just one indication of credit risk. Would anyone – Mr. Forbes included – buy a stock based on one metric?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s