Tag: cd

Beige Book definition explanation

What is Beige Book?
A commonly used name for the Fed report called the Summary of Commentary on Current Economic Conditions by Federal Reserve District. It is published just before the FOMC meeting on interest rates and is used to inform the members on changes in the economy since the last meeting. Read more for examples and further explanation including related video clips and also comments
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Dow Jones CDX Indexes definition explanation

What is Dow Jones CDX Indexes?
A series of indices that track North American and emerging market credit derivative indexes. The purpose of the combined indexes is to track the performance of the various segments of credit derivatives so that the overall return can be benchmarked against funds that invest in similar products. Read more for examples and further explanation including related video clips and also comments
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Subprime Credit definition explanation

What is Subprime Credit?
General term for borrowings of subprime debt, or loans made to people with less-than-perfect credit or short credit histories. Subprime credit includes the original borrowing itself, as well as any derivative products such as securitizations that are based on subprime loans and then sold to investors in the secondary markets.

A big portion of the total market for subprime credit is based on subprime mortgages, or home loans to borrowers of questionable creditworthiness. Read more for examples and further explanation including related video clips and also comments
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Synthetic Collateralized Debt Obligation definition explanation

What is Synthetic Collateralized Debt Obligation?
A form of collateralized debt obligation (CDO) that invests in credit default swaps (CDSs) or other non-cash assets to gain exposure to a portfolio of fixed income assets. Synthetic CDOs are typically divided into credit tranches based on the level of credit risk assumed. Initial investments into the CDO are made by the lower tranches, while the senior tranches may not have to make an initial investment.

All tranches will receive periodic payments based on the cash flows from the credit default swaps. If a credit event occurs in the fixed income portfolio, the synthetic CDO and its investors become responsible for the losses, starting from the lowest rated tranches and working its way up. Read more for examples and further explanation including related video clips and also comments
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Loan Credit Default Swap – LCDS definition explanation

What is Loan Credit Default Swap – LCDS?
A type of credit derivative in which the credit exposure of an underlying loan is swapped between two parties. A loan credit default swap’s structure is the same as a regular credit default swap, except that the underlying reference entity is limited strictly to syndicated secured loans, rather than any loan or bond.

Also know as a “”loan-only credit default swap””. Read more for examples and further explanation including related video clips and also comments
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McMansion definition explanation

What is McMansion?
Slang that describes a large, opulent house that may be generic in style and represents a good value for a homebuyer in terms of its size. This type of home is built to provide middle and/or upper middle class homeowners with the luxurious housing experience that was previously only available to high net worth individuals.

The name is derived as a play on words on McDonald’s fast food restaurants, as these homes also represent the pervasiveness and excessive consumption that critics often associate with Mcdonald’s. Read more for examples and further explanation including related video clips and also comments
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Diversity Score definition explanation

What is Diversity Score?
A measure, created by Moody’s Investors Service, to estimate the diversification in a portfolio, specifically in the context of a collateralized debt obligation (CDO). The calculation methodology for a diversification score takes into account the extent to which a portfolio is diversified by industry. Read more for examples and further explanation including related video clips and also comments
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Retail Banking definition explanation

What is Retail Banking?
Typical mass-market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs). Read more for examples and further explanation including related video clips and also comments
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Signal Line definition explanation

What is Signal Line?
A moving average plotted alongside a technical indicator and is used to create transaction signals. Buy signals are generally created when the indicator crosses above the signal line, while sell signals are generated when the indicator crosses below it.

A signal line is also commonly known as a “”trigger line.”” Read more for examples and further explanation including related video clips and also comments
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