To insure $10 million of AAA GE Capital bonds against default, it was costing buyers $1,650,000 upfront, and an annual payment of $500,000.
How much of these contracts have traded the last couple of days?
“We looked at the actual CDS trades on Monday and Tuesday,” he said. “It was a total of $35 million over the two-day period. Normally, it’s $100 million a day. Was that really market fundamentals or was it just some sort of disruption based on very narrow trades in a volatile time?”
Is that a market, or as GE says, just a scare tactic?