Credit Default Swaps - CDS.

Investors are racing to buy credit default swaps to protect their portfolios in the event the AI boom unravels, sending trading volumes surging for an instrument that shot to prominence during the global financial crisis.

More than $9bn worth of CDS linked to bonds issued by Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and Nvidia was traded on average each week in September, up from less than $2bn in July.

“CDS has become a key bellwether of investor sentiment towards hyperscaler funding and the broader AI trade”

Financial Times 20 October 2026

https://www.ft.com/content/6dd31584-064c-4015-bf5d-e5747799ccd5?syn-25a6b1a6=1


A reasonable rule of thumb in markets is that whenever you hear the letters C, D and S in one sentence, something bad is happening.

Förra veckan en livlig och nyttig generalrepetition för hur en sprickande AI-bubbla skulle kunna se ut.


Bill Demchak called the “prince of darkness” after he led the development of the credit-default swap market.

https://englundmacro.blogspot.com/2025/09/bill-demchak-called-prince-of-darkness.html


How Credit Default Swaps Work

In the 2008-2009 financial crisis that nearly took down the entire U.S. financial system was a boom in collateralized debt obligations (bundles of risky mortgages) and 

credit default swaps (insurance deals on risky mortgages.) 

https://englundmacro.blogspot.com/2023/10/country-gardens-missed-payment-triggers.html


Eurokrisen: När är en händelse inte ett event? Ett event som kan utlösa Credit Default Swaps?

https://englundmacro.blogspot.com/2011/06/eurokrisen-nar-ar-en-handelse-som-i.html


Volcker argued that bankers’ only invention of the previous two decades that had actually helped people was the automated teller machine (bankomater), while innovations like credit default swaps had “brought us to the brink of destruction.”

JK Galbraith, writer of a classic account of the Great Crash of 1929

https://englundmacro.blogspot.com/2026/04/svd-ingen-anlednint-till-oro-privata.html


Kommentarer

Skicka en kommentar

Populära inlägg i den här bloggen

Mervyn King

Mervyn King was governor of the Bank of England during the financial crisis Mervyn King is playing a game of chicken with the world’s most irresponsible industry. Martin Wolf, Financial Times 21/9 2007 Man who started QE. King is good at articulating what’s wrong with the global economy, not so good when it comes to solutions. https://englundmacro.blogspot.com/2025/07/mervyn-king.html
Läs mer

4 oktober. Vänsterpartiets kopplingar till terrorklassade islamistiska nätverk. Why Bowl Together When You Can Scroll Alone? Wall Street’s AI Party.

Bild
  Vänsterpartiets kopplingar till terrorklassade islamistiska nätverk blev nyckeln till deras valframgångar. I stället för att verka avskräckande har skandalerna kring partiföreträdare som öppet skyltat med Hamassympatier och deltagit i hyllningar av massakern på Novafestivalen 2023 lockat stora muslimska väljarskaror i utanförskapsområden.  Men dagens vänsterpartier har hittat en väg ut ur socialismens klasskampspolitik – ett arbetarparti utan arbetare har ju ändå ingen framtid.  I stället såg vänstern sin ljusnande framtid i grupper som bär tydliga likheter med palestinarörelsen i fråga om synen på judar. Socialismens djupa rötter i antisionismen, som även Karl Marx gav näring åt, trots att han var jude, kunde således vävas samman med Palestinaaktivismens antisemitiska slagord. Unni Drougge Epoch Times 2026-10-01 https://www.epochtimes.se/vanstern-gar-fran-klasskamp-till-klan Why Bowl Together When You Can Scroll Alone? Bowling was once popular as a family-friendly way ...
Läs mer

France: between the bond market and the barricades

Bild
  The country is being hit by a pre-election debt sell-off. Many fear it could shake the Eurozone. France’s debt has reached €3.5tn, at nearly 120 per cent of GDP, far above the Eurozone average. Servicing costs the state’s single biggest expenditure ahead of education or defence. The additional interest rate that France pays to borrow over ultra-safe German debt has surged to around 1.4 percentage points on 10-year debt. In the worst-case scenario, some think the European Central Bank could be forced to come to the rescue. That could come at the cost of demanding structural reforms, such as slashing pension spending, which the French public has long rejected. Financial Times 6 October 2026 https://www.ft.com/content/9b252b46-a87c-45e7-a09a-45a39ce077b8?syn-25a6b1a6=1 In Europe, the shadows of the 2011-12 crisis are emerging again. Lorenzo Bini Smaghi Financial Times 5 October 2026 The writer is a former member of the executive board of the European Central Bank and former chair of...
Läs mer