2 november 2011

Macro Man: Monty Python takes on the CDS market

In navolging van de dead parrot sketch verzon de macro man de volgende sketch

(bron:http://macro-man.blogspot.com/2011/10/tmms-ex-product-sketch.html (via knipsels van Bianco)

“I wish to complain about this CDS what I purchased not half a year ago from this very investment bank”"Oh yes, the Hellenic Republic… What’s wrong with it?”

“It’s not paid out, that’s what’s wrong with it.”

“No, no, it’s just voluntary, look.”

“Look my lad, I know a dead product when I see one, and I’m looking at one right now”

“No, no, it’s not dead, it’s just voluntary.”

“Voluntary?!”

“Yeah… remarkable product, Sovereign CDS… beautiful name, innit?”

“The name don’t enter into it. It’s not paid out.”

“Nah, nah… it’s voluntary”

“Alright then, if it’s voluntary, I’ll ask it again… HELLOOOO ISDA! I’ve got a nice bid/ask spread for you when you pay up, ISDA CDS!”

“There it moved”

“No it didn’t, that was you pushing the market”

“I did not!”

“Yes you did! Helloooo ISDA!! IIIISSSSSDDDAAAAA!!! ISDA CDSSSS!!! PAAAAYYYY UUPPP!!! ISDAAAA…. …now that’s what I call a dead product.”

“No, No, it’ll pay next time.”

“Look, my lad, I’ve had just about enough of this. That product is definitely deceased, and when I bought it not half a year ago, you assured me that it would pay out when Greece defaults, and that it’s lack of movement was due to traders being tired and shagged out after a long night at Stringfellows”

“It’s probably pining for the Subords.”

“Pining for the Subords?! What kind of talk is that?! Look, why didn’t it hedge my bonds the moment they defaulted?”

“The Sovereign CDS prefers not to pay for voluntary defaults, it’s beautiful product… lovely name…”

“Look, I took the liberty of examining that contract, and I discovered that I had reason to believe that it hedges a default as it has ‘default’ in its name.”

“Well of course it’s got ‘default’ in its name, otherwise we wouldn’t have been able to sell it.”

“Look, matey… this product wouldn’t pay out if an asteroid the size of France hit Athens. It’s bleedin’ demised.”

“It’s not… it’s voluntary…”

“It’s not voluntary, it’s passed on. This product is no more. It has ceased to be. It’s expired and gone to meet its seller. This is a crap product. It’s a fix, bereft of value, my P&L’s in pieces. If you hadn’t have said it would pay out on default, it would never have traded. It’s gone down the toilet and joined the CDO unsellable. THIS IS AN EX-PRODUCT”.

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