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  • Where Pricing Anomalies Abound

    03/08/2009 11:45:36 PM PDT · by CutePuppy · 8 replies · 552+ views
    Barrons (subscription ^ | March 7, 2009 | Michael Santoli
    Credit-default-swap traders may need a shorter leash. LIQUIDATION. A GOOD SOAKING. PLENTY OF TEARS. It is real wet out there in the markets. Given all the known big-picture reasons for this drenching, does it makes sense to continue enabling the folks who make and sell umbrellas to force it to rain at will? The people with a stake in umbrella prices who are able to trigger a downpour are the traders who bid up credit-default swaps on individual companies, whether they own their debt or not, and short the stock. In combination, these actions feed signals into the market that...