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Quote by Hendrith Vanlon Smith Jr.

“Corporate lending involves financial institutions providing loans to businesses – and since businesses are the lifeblood of the economy, corporate lending is really important.”

Quote by Hendrith Vanlon Smith Jr.

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Hendrith Vanlon Smith Jr.

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“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. For instance, you might pay $200,000 a year to buy a ten-year credit default swap on $100 million in General Electric bonds. The most you could lose was $2 million: $200,000 a year for ten years. The most you could make was $100 million, if General Electric defaulted on its debt any time in the next ten years and bondholders recovered nothing. It was a zero-sum bet: If you made $100 million, the guy who had sold you the credit default swap lost $100 million. It was also an asymmetric bet, like laying down money on a number in roulette. The most you could lose were the chips you put on the table; but if your number came up you made thirty, forty, even fifty times your money.”

Wall StreetCorporate BondsCredit Default Swap
Book:The Big Short: Inside the Doomsday Machine
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“The bond market plays a pivotal role in the global economy. It provides a vital source of capital for governments and corporations, enabling them to fund infrastructure projects, expand operations, and pursue innovation. Bond yields also serve as benchmarks for other interest rates, influencing borrowing costs for businesses and consumers alike.”

InvestmentMunicipal BondsCorporate BondsBond Investing
Book:Bond ing: The Power of Investing in Bonds
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