Credit default swaps are the devil

I wrote a long post about credit default swaps and their evil effect on this whole mess. But it is just too disgusting to put up. Just read these articles. They tell you who are the greedy bastards who may very well bring down the world’s economy.

Dallas News
Houston Chronicle

Here is one thing that staggers me, from American Public Media’s Marketplace:

BOB MOON: OK, I’m about to unload some numbers on you here, so I’ll speak slowly so you can follow this.
The value of the entire U.S. Treasuries market: $4.5 trillion.
The value of the entire mortgage market: $7 trillion.
The size of the U.S. stock market: $22 trillion.
OK, you ready?
The size of the credit default swap market last year: $45 trillion.
KAI RYSSDAL: That’s a lot of money, Bob.

The big article is from 60 minutes which looked at this debacle. If it had just been mortgages, we could have dealt with it. But these idiots made side bets and their loss will harm us all. Every one of those guys should be forced into a perp walk.

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3 thoughts on “Credit default swaps are the devil

  1. Do you have a Private mortgage insurance (PMI) policy? If you do your PMI insurer has passed along their risk by buying a credit default swaps (CDS) to protect them in the event you have your home that your home is taken away from you. CDS and PMI are the same thing. Make people wanting to buy a home put at least 20% down if you don’t like them.

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