something doesn't add up... or does it?, page-5

thxs pec

yes i have been ferreting around this CDS & CDO issue for a while now - these instruments are not just linked to mortgage markets - that only seems to be a part of the problem - the other and substantial problem seems to be those batches of CDSs (toxics) that are structured as pure gamble - in simplest form... 'You pay us USD$5 billion in the unlikely event that each and all of companies X, Y, Z, T & Q suffers a credit default event within 48 months of the date of this instrument, where a default event is defined by clause GG'...

fro what i can garnish, since the subprime collapse started going off, some of these companies X, Y & Z have suffered a default event - so what i think we are seeing is all the major instos holding on to massive cash reserves in case companies T & Q also suffer a default event, which would mean the 'potential' liability of USD$5 billion materialises into an actual liability that one or more instos has to pay-up for...

but these instos don't seem to be holding one or two of these toxic securities potentially exposing them to say 5 or 10 billion dollars - no, many instead seem to be holding bundles of them with total (potential) liabilities running into the 100s of billions...while some i must hazard are holding bundles of potential liabilities runnning into the trillions given the toxic securities market was last valued at USD$60 trillion odd, and there are only so many major instos on this planet...

alan kohler also wrote a piece about these pure gambling securities a couple of months back, but didn't manage to quantify in any way possible direct potential liabilities of the instos, but instead he focussed just on the ramifications of a default event by GM

anyway i would appreciate it if anyone can point me to any further info on this issue - i'm looking for any real hard and complex data from any source atm

thxs &

good luck