Street Capitalist: Event Driven Value Investments

1. jorgan on May 22nd, 2008

   hi, are names like HanoverRe. and Barclay’s liquid and deep?

2. Tariq on May 22nd, 2008

   Not sure what you mean by deep but Barclay’s indicated that they might try to buy some banks that are in trouble at the moment, so they may be well equipped.

3. jorgan on May 23rd, 2008

   sorry, meant the names. you offer quotes, so i thought maybe you may have a read on their volume + liquidity. also how large a position (depth) can be taken ?
   trade single-names or the index (CDX) ?

4. Tariq on May 23rd, 2008

   Oh, sorry about that. I thought you meant the company’s stock, not the credit default swaps. To be honest, my exposure to credit default swaps has been only through Fairfax and Odyssey Re, so I’m not much of an expert about their liquidity or volume. I don’t have any exact information on the liquidity or volume for Barclays or HanoverRe, if you’ve got access to a bloomberg terminal you probably could find that.

   But in general, I found this -
   David Brickman, head of European credit strategy at Lehman Brothers, said: “Generically, trading volumes [in credit derivatives] are a lot lower than they were in the summer.

   “The theory is that if people can’t trade bonds, they’re going to go to CDS [credit default swaps]. But in an environment like this you can’t get liquidity on single-name CDS either. That just leaves the indices.”

   This would make me think things have slowed down (in terms of liquidity and trading volume) in the CDS market, I know that the prices have come down since February.

5. jorgan on May 23rd, 2008

   Sparsely have access to Bloombg data. but get realtime / price discovery from ‘Reuters3000 Xtra’ ,now and then. You trade? why can’t i find blogs of folks who trade pure Credit. Sure it’s private, but anyone saavy can participate. Some market forces are clear, simple, easy to exploit. When there’s discovery in liquid names –unlike situation you mention above where broad / systemic liquidty drys up–anyone can trade flow (directional account).

6. jorgan on May 23rd, 2008

   the market just reached a notional $58 trillion from $46t a year prior. that’s not all ’smart money’.

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