links for 2011-04-15

4 thoughts on “links for 2011-04-15”

  1. Sallie Mae is the largest student loan firm. It crashed hard around the time of the mortgage and credit crisis a few years ago due to liquidity/leverage… similar to the collapse Bear Stearns.

    Credit Default Swaps (CDS) rise in value as the risk of a firm’s collapse rises, as CDSs are an “insurance” security. A long position in the Credit Default Swaps (CDS) of Sallie Mae’s competitors who have not already crashed and have high probability of default rate on their risky student loans is a way to profit from students not being able to pay back their loans.

    Note of caution: Sallie Mae announced a dividend for the first time since it crashed- management’s way of saying “we’re doing better.”

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