ust as the open interest of a futures or options contract can swell to a quantity greater than what is available for delivery, the volume of CDS contracts created in this over-the-counter market can swell way beyond the physical quantity of the actual corporate bonds being covered. And I do mean way beyond; while actual data are hard to come by, some estimate that the volume of outstanding CDS contracts on bonds for now-bankrupt auto parts manufacturer Delphi was 140 to 175 times the actual quantity of bonds available. As early-20th century stock operator Daniel Drew chirped about short-selling, "He who sells what isn't his'n / Buys it back or goes to prison." Recall the scene in Mel Brooks' The Producers when Max Bialystock is informed he has sold well more than 100% of the profits. Most of us do not fancy ourselves wearing a bright-orange jumpsuit. ----------------------------------------------------The insured credit break-even is calculated by subtracting the cost of a five-year CDS from the bond and then comparing it to the base case of simply earning the return on a five-year swap. If the resulting number is less than 0%, as it was for Dana between August and October, the bond will remain under pressure until its yield rises. And if the bond remains under pressure, why own the stock? That, too, should fall, and indeed, the stock kept falling throughout this period.