Bond Broker Who Will Advertise My Offer?

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Twenty years ago, municipal quotes were easy to get, as was a prospectus. Bonds fluctuate less than stocks (supposedly), so that may be a factor. IMO, the institutional buyers have come to "own" the bond market. I've heard many municipal issues are sold in their entirety to one institutional buyer, without ever becoming public. Around 1992, the time of the Orange Cty CA debacle, I tried putting in a bid for a neighboring county's bond - none were available, but the bid/ask was

77/94 or thereabouts. The broker said, "We have none in inventory."

The justification is lowering costs of issue, and bonds are apparently a different world, but I think it's a flaw in the market system, as you have noted. That said, it's easy to get quotes on Treasuries. The WSJ lists some corporates. Any idea where to get quotes on CDS's?

The whole CDS thing is a complete debacle at every level:

1) Retail investors cannot even participate in the market. The minimum purchase of a CDS is normally $5 Million, and it is a carefully negotiated instrument with lots of custom contract terms. The way they work is that the buyer buys $5M of insurance on a bond or issuer and pays the CDS spread as an insurance payment for recovering in case of default. In case of default, there is an auction to determine the recovery percentage, and the insurance contract pays the difference. If the recovery on defaulting bonds is seven cents on the dollar, then the CDS to insure that bond pays 93 cents (the difference). Some of the hedge funds that used these things were paying 1/2 of 1% to insure against a failure of Bear Stearns or Lehman, and then walked away with a 93% payout. That's a 180x payoff, and there are stories of many wealthy individuals who turned $25M investments into $1B or more by betting against the investment banks by CDS instruments. 2) The values of specific CDS are kept hidden by market participants, who demand payments of huge amounts of money to see the bid and ask. It is a completely non transparent market if you are worth less than $100M and can afford to spend $100K per year to get the "subscriptions" to CDS price data. 3) Do people understand what is happening with these government "bailouts" to AIG and some of the larger banks? Some of these hedge funds have taken out CDS contracts that exceed the actual value of the asset being protected 10, 20, and 30 times over!! The government "bailout" money is largely being used to pay off speculators who bought these CDS contracts and who had no underlying economic interests in the entity they were insuring. To me that is obscene, and yet the commentators on TV just don't seem to get it, and don't explain it correctly.

I read somewhere that if enough businesses fail in 2009, there wouldn't be enough money in Europe and the U.S. together to cover the losses, if all of the speculative buyers of CDS contracts were actually paid off. There is a great article about this here:

I agree completely with the author's suggestions here: use prepackaged Chapter 11 bankruptcies to pay off CDS contracts where legitimate economic interests were involved (e.g., a bank that wanted to insure its loan portfolio) but wipe out the speculators in the bankruptcy. The entire financial crisis would largely just go away if they followed that suggestion. Avoiding Chapter 11 and relying on bailouts is just throwing huge amounts of taxpayer money at paying off speculators, by paying AIG and banks to honor the CDS obligations they wrote to speculators who had no interests in the stocks they were "protecting". The whole CDS idea is flawed as implemented, and we need some leadership that can get their arms around this fast and neutralize it.

Yes, it would appear that at many levels, we've been had.