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Old 07.10.2008, 13:06
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Re: How Safe is UBS

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........... Each time a bank/broker/fund defaults, the debtholders will turn to the person who sold them the CDS to make them whole, and realize that there is no money in that pot to make good their losses. .......
So far so good
"The default of up to $500bn in derivative contracts linked to Fannie Mae and Freddie Mac was settled on Monday, the biggest such exercise ever carried out."

&

"The next test will be the unwinding of CDS linked to Lehman, which filed for bankruptcy three weeks ago. Michael Hampden-Turner, a credit strategist at Citi, estimates that there could be $400bn of credit derivatives referenced to Lehman. These contracts will be settled on Friday."

Wonder how much is left in the pot?

Marton
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