Friday, September 26, 2008
What the hell is a credit default swap, anyway? A primer on this ridiculous mess.
This Daily Kos diary is one of the best summaries I've seen of how we got into the financial mess that we are in. Many of you may dismiss the diary simply because of it's source, but it's largely non-partisan. You may not agree with all of his conclusions, but you'll probably have a better understanding of the origins of the crisis.
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There's a lot floating around about CDSs and their role in all this mess. Unfortunately, it's not talked about by the media because it's hard to explain (much like electoral votes).
The real issue with credit default swaps is that they were bought not JUST as a hedge against credit, but often as a speculative instrument.
Take a look at this article for more information.
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