Research Zeitgeist: Bloggers and Credit Default Swaps
The correlation between bloggers and credit default swaps is probably minimal, but both featured prominently in the top posts this week at Research Recap. Flattery may have played a part in pushing Forrester Research’s study on the influence of bloggers on consumers to the top of the heap. But it also likely reflects the fact that businesses are making blogs a growing part of their marketing strategy.
It was a good week for Forrester with its report on how video will dominate the world also getting plenty of airtime.
Credit default swaps may not be mainstream, but they are an increasing source of consternation, possessing the potential to derail the recovery of embattled financial institutions, even though they are specifically designed to insure against losses. The situation is not much different than insuring your house and finding out that the insurer can’t pay out when your house burns down.
Audit Integrity’s Jim Kaplan has been banging the drum on this topic, and the increasing precariousness of the monoline insurers only lends support to his argument. His analysis Credit Default Swaps Adding Rather Than Mitigating Risk? was our second most popular post of the week, and his followup commentary Credit Default Swaps a Potential Litigation Time Bomb also made the top five. Oxford Analytica also weighed in on the topic, suggesting tht the same kind of counterparty risk problems could spill over into other derivatives markets, such as the volatile energy sector.
Research Recap Quote of the Week
While recognising that speculation can have a day-to-day impact of price moves, the fact that all producers are working virtually flat out and that there is no sign of any abnormal stockbuild gives a strong indication that current oil prices are justified by fundamentals. - International Energy Agency
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