Wall Street Is Desperate for a Better Credit Hedge
Building a better CDS index.
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In November 2014, the credit market appeared to have an argument with itself.
In one segment of the market—where the cash bonds sold by companies are traded—spreads rose sharply as investors fretted over the impact of lower oil prices on energy companies. In a more obscure corner of the market, the spread on an index comprising a type of derivative known as a credit default swap (CDS) was falling.