Blythe Masters Quotes

Credit default swap gives you something to do. You can buy some credit default swaps from them to protect yourself against the bankruptcy of people who owe you money.

Credit default swap is basically just an agreement that I have with you, where I sell you insurance on some bond you own. If the bond goes belly up, I promise to pay you. And as long as the bond doesn't go belly up, you pay me for selling you insurance.

I was able to use credit default swaps to protect not only my investments but the hundreds of jobs that exist because of my investment. I understand the dangers of credit default swaps and the benefits of credit default swaps.

Credit-default swaps remedied the problem of open-ended risk for me. If I bought a credit-default swap, my downside was defined and certain, and the upside was many multiples of it.

Credit-default swaps, I think, have serious problems associated with them.

A bank needs models to measure risk. The problem, however, is that any one bank can measure its risk, but it also has to know what the risk taken by other banks in the system happens to be at any particular moment.

The very nature of finance is that it cannot be profitable unless it is significantly leveraged... and as long as there is debt, there can be failure and contagion.

The chances of a bank going out of business are extremely slim, but it's always a good idea to spread around major sums so every penny is backed by insurance.

Most of the time, your risk management works. With a systemic event such as the recent shocks following the collapse of Lehman Brothers, obviously the risk-management system of any one bank appears, after the fact, to be incomplete. We ended up where banks couldn't liquidate their risk, and the system tended to freeze up.

I'm afraid sometimes certain individual cases of defaults are unavoidable. What we should do is to step up monitoring, properly handle relevant matters, and ensure there is no regional and systemic financial risk.

Most companies can survive even if their debt ratings are lowered below investment grade, although they will have higher borrowing costs.

What the banking system needs is creditors who monitor risk and cut their exposure when that risk is too high. Unlike regulators, creditors and counterparties know the details of a deal and have their own money on the line.

Large credit guarantees also impede optimal allocation of financial resources and increase moral hazard.

I'm especially baffled by the idea of taking insurance against a U.S. default. If America defaults, we're talking about a chaotic world - Mad Max, more or less - in which case, who imagines that insurance claims will be honored?

Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default. ... The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously.

I think the credit default swaps can take the place of the rating agencies who really have missed the ball in this procedure and are quite conflicted by the way the ratings are paid for. So, I would like to see credit default swaps become an evermore important way of understanding credit risk in the economy.

A credit default swap was confusing mainly because it wasn't really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term.

I do believe CDSs [credit default swaps] have been miscast, much as poor workmen tend to blame their tools.

Bond investors are the vampires of the investment world. They love decay, recession - anything that leads to low inflation and the protection of the real value of their loans.

We've used derivatives for many, many years. I don't think derivatives are evil, per se, I think they are dangerous.

Life insurance is time. The time a man might not have. If he needs time, he needs life insurance.

Life insurance is a commodity.

I think it would be a great improvement if there were no D&O insurance . The counter-argument is that no-one with any money would serve on a board. But I think net net you'd be better off.

If people understood what life insurance does, we wouldn't need salesmen to sell it. People would come knocking on the door. But they don't understand.

Life insurance can be numbingly complicated. Clients often turn off their brains and surrender their judgment to the very agent or planner who brought on their coma in the first place.