Wednesday, October 29, 2008

Counterparty Risk...... Lufthansa Edition

I assume we will hear similar stories for month to come...... We all know that the AIG rescue was mainly because they were a major cds unwriter ( see A Question for A.I.G.: Where Did the Cash Go? ).... After the Lehman collapse and the actions taken from the governments i assume the real danger will come from non bank counterparties ( hedge funds, companies ).......

Ich denke das wir ähnlich gelagerte Geschichten demnächst noch öfter zu hören bekommen.... Die starke Stellung von AIG gerade im Hinblick auf CDS im Zusammenhang mit Banken war der eigentlich Grund für die Rettungsaktion ( siehe A Question for A.I.G.: Where Did the Cash Go? ). Ansonsten hätten alleine europäische Banken zweistellige Mrdbeträge verloren. Nach Lehman haben ja alle politischen Vertreter klar gemacht das es keine Bankenpleiten (Versicherungspleiten ?) mehr geben wird und daher ist davon auszugehen das die nächste Welle der "Counterparty" Risiken sicher von Hedge Fonds und Firmen kommen wird die nicht mehr in der Lage sein werden Ihren Verpflichtungen nachzukommen.....


Lufthansa's fuel-hedging for the remainder of 2008 fell to 72 percent of needs from 85 percent because the Sept. 15 collapse of Lehman Brothers Holdings Inc. liminated some of the contracts, the airline said. The company, which forecasts fuel expenses will rise 38 percent to 5.4 billion euros this year, is 57 percent hedged for 2009 needs. Spending on fuel next year is targeted at 5.6 billion euros, Gemkow said.

The airline, which took a charge of 76 million euros because of Lehman's failure, doesn't plan to build up its hedging position.

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Anonymous Anonymous said...

Is this still an issue with falling oil prices?

3:12 PM  
Blogger russell1200 said...

Our local airport authority (RDU Airport near Raleigh, North Carolina, USA) lost some of its interest rate swaps when Lehman went under. Interest rates have gone down since they made the swap deal, but they are not thrilled with the idea of going naked (no hedge).

7:46 PM  
Blogger jmf said...


judging from the 76 Mio is assume that it is still relevant......

Would have probably been worse if oil stayed high......

1:37 AM  

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