Wednesday, March 4, 2009

GE Capital CDS's Explode

It costs $7 million to insure $10 million in GE Capital debt for ten years. GE Capital credit default swaps require a $2 million up front payment, followed by $500,000 a year for ten years. The week Hank Paulson yelled fire to Congress, Wall Street investment house CDS's behaved wildly. Should we expect another emergency declaration?