The Year of the Synthetic CDO - No Holds Barred
(ContentDesk) September 1, 2005 -- 2005 has been a banner year for the derivatives industry.
The growth in derivatives trading has been exponential, especially in the area of credit derivatives driven by the investment zeal of hedge funds worldwide.
So far this year, the average dealer is at a pace to have more than doubled the number of credit derivatives trades as handled last year, and the number of 2004 trades was already a doubling over 2003 volume.
While as recently as July 27, 2005, policy makers like the Credit Risk Management Policy Group II cautioned restraint on the "undisciplined" use of complex derivative products, recent legislation in the derivatives product area in the United States makes derivatives trading all the more enticing.Buried in recent bankruptcy legislation to take effect on October 17, 2005, under Title IX of the U.S. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Act"), is a statutory safe-harbor from the automatic stay provisions of the Bankruptcy Code for hybrid derivative products.
The coverage of the safe harbor includes credit derivatives and some of the very types of complex derivatives trades that the hedge funds have been ardently pursuing in recent months.
The safe-harbor is not new as to plain-vanilla swaps, but it does add certainty as to application for all manner of other types of trades that constitute "financial contracts" that did not even exist when the safe-harbor concept first came into play.
The world of now statutorily defined "financial contracts" is large, be they repurchase agreements, equity derivatives, weather swaps, or just about anything that can be documented on an ISDA (tm) master agreement.
The new law provides for uniform treatment of a wide variety of derivative products and much needed legal certainty for the termination, liquidation, and acceleration of financial contracts in accordance with their terms in the event of counterparty bankruptcy.What does bankruptcy law have to do with derivative products? Avoidance of a market liquidity crisis.
Derivatives deals need liquidity: recurrent payments on time and certainty of termination payments when scheduled.
Normally, the filing for bankruptcy by a party to a commercial contract in the U.S. causes a number of disruptions in the free flow of business activities with that entity.
As a bankrupt debtor, the entity is protected from the claims of creditors under the automatic stay provisions of the U.S. Bankruptcy Code.
The non-debtor party is not able to terminate the contract and exercise its contractual remedies without permission of the bankruptcy trustee.
The bankruptcy trustee, in turn, has the power to avoid certain transfers otherwise due to the non-debtor party.
In short, no one gets paid very fast, and often not at all.In the world of financial contracts, which include swaps, forwards, repurchase agreements, commodities contracts and security contracts, the market disruption and ripple effect of liquidity events that the bankruptcy of a counterparty could entail are severe.
In 1990, legislation was enacted to provide a safe harbor for swap agreements from the automatic stay provisions of the U.S. Bankruptcy Code when a swap counterparty filed for bankruptcy.
Similar amendments were made to the regulatory regimes affecting banks in receivership.
However, over the course of the last 15 years, the derivatives markets have outpaced the statutory understanding of what constitutes a swap agreement under bankruptcy legislation.New products such as debt and equity swaps, and credit derivatives such as credit default swaps and total return swaps have developed into vast markets of their own.
Moreover, these derivative instruments have been the motor for a new industry of synthetic securitizations that now dwarfs the cash-based securitization deals.
According to the Financial Times, recent estimates by industry specialists have put the market size of synthetic collateralized debt obligations at $800 billion.
Title IX of the Act provides for uniform treatment of all these derivative products, including those not yet created, and much needed legal certainty for their termination and pay-out upon the insolvency of a bank or bankruptcy of a corporate or other entity.
The Act provides for amendments to the Federal Deposit Insurance Act and related bank insolvency statutes so that both bank and non-bank entities have similar safe-harbor treatment available to them upon bankruptcy or receivership.
Although procedures in commercial bankruptcies differ from bank receiverships, the amendments extend equally between them to cover basic assurances against cherry-picking of executory contracts and to provide a safe-harbor from the automatic stay for new types of financial products.
For 2005, competing forces of caution and industry drive have not yet evened out.
It is the year of the derivative product and there is little that policy groups can do to stem the tide.For further information about the Act and the ramifications of Title IX on derivatives trades, please contact Ellen H. Clark, Esq., Head of the Derivative Products Group, in Salans New York Office at +1 (212) 632-8375 or (917) 213-9409..
Critical Information You Need to Protect Your Retirement
Copyright 2006 Equitrend, Inc.
America is heading for a train wreck.
Everyone knows it's coming, but no one is doing anything about it.
As an individual, you can wait and hope the inevitable doesn't happen, or you can prepare yourself and your finances now so you and your family can avoid and even profit from the disaster that's rapidly approaching.
The train wreck I'm talking about is the approaching retirement of the Baby Boom generation coupled with the failure of the country's pension system, a negative savings rate and the looming bankruptcy of Social Security and Medicare.
Here are the chilling facts:
--For the past two years, the savings rate in the United States has been negative.
That means that people are spending more than they're saving.
--The private pension system in America is as dead as the dinosaurs.
Economists predict that companies will...
Bankruptcy > Critical Information You Need to Protect Your Retirement
2nd-to-no-1-in-loans.com Helps Consumers Find Correct Information, Advice and High Quality, Individually Selected Companies That Meet All Their Loan Needs
For the past couple of years, interest rates for 15-year and 30-year fixed home loans have hit an all-time low, allowing more consumers to be able to afford to buy a home. But, with the rates staying low, some renters who want to be homeowners do not know how to start the process to buy a home because there are so many different loan programs, services and companies. That's why Glenn Sarault, owner of SunBright Publishing, launched http://2nd-to-no-1-in-loans.com this week. "We've taken the time to find companies who offer many types of loans. We were also successful in finding companies who are able to assist with the difficult decisions around bankruptcy.
You'll be happy with your connection to select companies offering assistance andoutstanding rates on whatever type of loan you may need," Sarault said.http://2nd-to-no-1-in-loans.com helps consumers locate...
2nd-to-no-1-in-loans.com Helps Consumers Find Correct Information, Advice and High Quality, Individually Selected Companies That Meet All Their Loan Needs
Bankruptcy > 2nd-to-no-1-in-loans.com Helps Consumers Find Correct Information, Advice and High Quality, Individually Selected Companies That Meet All Their Loan Needs
Bad Credit Mortgage Loans Online - How Your Fico Credit Score Can Affect Your Loan Approval
When applying for a mortgage loan when you have a bad credit history. There are a few things you should know about your FICO score that will help you know what to expect from mortgage lenders.With a credit score below 585, you will need to put at least 10-20% as a down payment on the property. You will not likely be approved for 100% financing at this point.If you have a credit score of between 585-599, you will probably need around a 5% down payment in order to get an approval for a home mortgage loan. You will still need to get your approval from a subprime mortgage lender. You will need to use a lender who specializes in loans for people with "less than perfect credit" or situations that make it difficult for a person to get financing for their home.If you have a credit score of 600 - 620, you will probably be able to get an approval for 100% financing.
You will also, in this situation, still need to use a subprime lender.With a credit score of 620 or higher, you may be able...
Bad Credit Mortgage Loans Online - How Your Fico Credit Score Can Affect Your Loan Approval
Bankruptcy > Bad Credit Mortgage Loans Online - How Your Fico Credit Score Can Affect Your Loan Approval
Top Ten Reasons to File Bankruptcy
1. Eliminate the legal obligation to pay many of your debts..
This process of wiping the slate clean is called a discharge of debts. The goal of a discharge is to reduce debt to give you a fresh start. Whether it is through straight bankruptcy (Chapter 7 Bankruptcy) or through reorganization (Chapter 13 Bankruptcy), most or all of your debts can be cleared.
2. Stop foreclosure on you house and allow you to effectively make payments to catch up on missed payments of your mortgage. If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure any time prior to the sale. Bankruptcy does not eliminate mortgages on your property without payment. Rather, bankruptcy will structure a plan in order to repay your mortgage arrears (the amount that you are behind).
<stop foreclosure> 3. Prevent your car or other...
Top Ten Reasons to File Bankruptcy
Bankruptcy > Top Ten Reasons to File Bankruptcy
The Year of the Synthetic CDO - No Holds Barred
(ContentDesk) September 1, 2005 -- 2005 has been a banner year for the derivatives industry.
The growth in derivatives trading has been exponential, especially in the area of credit derivatives driven by the investment zeal of hedge funds worldwide.
So far this year, the average dealer is at a pace to have more than doubled the number of credit derivatives trades as handled last year, and the number of 2004 trades was already a doubling over 2003 volume.
While as recently as July 27, 2005, policy makers like the Credit Risk Management Policy Group II cautioned restraint on the "undisciplined" use of complex derivative products, recent legislation in the derivatives product area in the United States makes derivatives trading all the more enticing.Buried in recent bankruptcy legislation to take effect on October 17, 2005, under Title IX of the U.S. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Act"), is a statutory safe-harbor from the...
Bankruptcy > The Year of the Synthetic CDO - No Holds Barred
Pay Off Debt Now: 5 Steps To Getting Your Finances In Order
In our world of dizzying change, nothing is more true than the time honored statement that circumstances always change. No where is this more true than with financial issues. Have you ever borrowed money, or charged up the VISA card at Christmas, all the while telling yourself that you would pay everything off with a coming tax refund or bonus? Sound familiar. And then what happens when the bonus money arrives? Let me guess - circumstances changed, the car needed brakes (or the kids needed braces, etc), and the VISA debt and interest charges keeps piling up. Unless you have a plan, you will always be caught in the unpredictable grip of 'changing circumstances'.
This is a slippery slope that can very quickly become serious financial stress. Consider the fact that Americans are declaring bankruptcy at record rates. One in every 100 families is affected by a bankruptcy. I was on this slope 10 years ago. Declaring personal bankruptcy and filing for divorce went hand in hand.
... Pay Off Debt Now: 5 Steps To Getting Your Finances In Order
Bankruptcy > Pay Off Debt Now: 5 Steps To Getting Your Finances In Order
2nd-to-no-1-in-loans.com Helps Consumers Find Correct Information, Advice and High Quality, Individually Selected Companies That Meet All Their Loan Needs
For the past couple of years, interest rates for 15-year and 30-year fixed home loans have hit an all-time low, allowing more consumers to be able to afford to buy a home. But, with the rates staying low, some renters who want to be homeowners do not know how to start the process to buy a home because there are so many different loan programs, services and companies. That's why Glenn Sarault, owner of SunBright Publishing, launched http://2nd-to-no-1-in-loans.com this week. "We've taken the time to find companies who offer many types of loans. We were also successful in finding companies who are able to assist with the difficult decisions around bankruptcy.
You'll be happy with your connection to select companies offering assistance andoutstanding rates on whatever type of loan you may need," Sarault said.http://2nd-to-no-1-in-loans.com helps consumers locate...
2nd-to-no-1-in-loans.com Helps Consumers Find Correct Information, Advice and High Quality, Individually Selected Companies That Meet All Their Loan Needs
Bankruptcy > 2nd-to-no-1-in-loans.com Helps Consumers Find Correct Information, Advice and High Quality, Individually Selected Companies That Meet All Their Loan Needs
The Year of the Synthetic CDO - No Holds Barred
(ContentDesk) September 1, 2005 -- 2005 has been a banner year for the derivatives industry.
The growth in derivatives trading has been exponential, especially in the area of credit derivatives driven by the investment zeal of hedge funds worldwide.
So far this year, the average dealer is at a pace to have more than doubled the number of credit derivatives trades as handled last year, and the number of 2004 trades was already a doubling over 2003 volume.
While as recently as July 27, 2005, policy makers like the Credit Risk Management Policy Group II cautioned restraint on the "undisciplined" use of complex derivative products, recent legislation in the derivatives product area in the United States makes derivatives trading all the more enticing.Buried in recent bankruptcy legislation to take effect on October 17, 2005, under Title IX of the U.S. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the "Act"), is a statutory safe-harbor from the...
Bankruptcy > The Year of the Synthetic CDO - No Holds Barred
The Benefits of Using on Online Freight Load Board
For those of you involved in the freight industry who have not yet used or heard of an online freightloadboard yet, let me tell you that you are missing out on a an incredable industry efficiency tool. An online freight loadboard is just that... it's an online medium through which both carriers and shippers can access both freight and freight capacity from the comfort of their computers in order to maximise thier haulage/shipping efficiencies. Some are fee-based while others are free.
...
Bankruptcy > The Benefits of Using on Online Freight Load Board
5 Simple Tips to Prevent MS Access Database Corruption
Having spent many hours fixing Access databases during the past 10 years of my life, I've put together this short list of 5 Simple Tips to Prevent MS Access Database Corruption. While the potential causes are numerous, I've found that the majority of actual cases can be prevented by following these 5 simple tips.It's important to understand that any time an Access client disconnects unexpectedly, it may set a "corruption flag" in the .mdb file indicating that the database is in a corrupt state...
Bankruptcy
Bankruptcy > 5 Simple Tips to Prevent MS Access Database Corruption
Octave Systems, Inc. New DVD Copier Dazzles
It features a new dual-layered and dual-format Pioneer drive that records speeds of up to 16X. With the dual layering, the DVD Copy Master can store up to 8.5 gigabytes of data. Octave's updated stand-alone DVD Copy Master offers efficiency and economy like no other DVD duplicator.The DVD Copy Master makes copying DVDs as easy as touching a button and requires no computer system. The DVD Copy Master functions with virtually all available formats. DVDs burn at speeds from 2X to 16X while CDs will...
Bankruptcy Octave Systems, Inc. New DVD Copier Dazzles
Bankruptcy > Octave Systems, Inc. New DVD Copier Dazzles
Choosing a Wine Gift Basket
During the holiday season, most of us are in a frantic search for presents for loved ones and friends. Next time, instead of the usual hassle of selecting a gift which will suit him or her, try sending a wine gift basket instead. Wine gift basketsare a perfect present for both men and women and suit every occasion e.g. Birthdays, Weddings etc. The information below will help you select an appropriate wine gift for that special occasion.
Who will be receiving the wine gift basket? Men will...
Bankruptcy Choosing a Wine Gift Basket gift baskets
Bankruptcy > Choosing a Wine Gift Basket
The Weight Loss Secret Behind Hoodia
Kalahari Desert, South Africa (ContentDesk) July 6, 2006 -- The onslaught of fashion magazines and shows has drummed the perfect shape of a fit body into everybodys brains. We all know how were supposed to look like to be attractive and to give off that carefree success look. What we did not know is that the next big thing in dieting comes from South Africa. From the sandy expanses of the Kalahari Desert intrepid businessmen bring a cactus called Hoodia. Weight loss experts are already excited...
hoodia Bankruptcy The Weight Loss Secret Behind Hoodia
Bankruptcy > The Weight Loss Secret Behind Hoodia
Bankruptcy
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