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To the more knowledgeable people around: can this trigger a credit default swaps crisis? Are all the Argentina CDS bought in the last decade really known to the
by bedane 12y ago
To the more knowledgeable people around: can this trigger a credit default swaps crisis? Are all the Argentina CDS bought in the last decade really known to the public?
- sz4kerto 12y agoNot really -- it's an event that has been expected for a while. CDS dominoes usually start falling when a significant AND unexpected event happens ('black swan'). Argentina in default is moderately significant but not unexpected. In other words, sudden changes in valuations cause a problem. Their government bond valuations have slowly approached zero therefore there's no sudden jump. The value of the CDSs does not change suddenly when Argentina is formally considered default if everybody has expected that outcome.