The Obama - Clinton Disaster Message Board

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Politics : The Obama - Clinton Disaster

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To: DuckTapeSunroof who wrote (4026)	12/29/2008 11:30:17 PM
From: RMF	Read Replies (1) of 103300

Default on all their "derivatives". They passed all their debt on but they "insured" it with Trillions of Dollars in derivatives. That's why the Lehman bankruptcy brought everything down. They LEVERAGED everything. They took in all this lousy debt but they couldn't pawn it off if they didn't offer some "insurance" to future holders down the line. They did that by offering "innovative" derivatives that would essentially insure the future buyers. They made money on the initial loans and they made more money off those little insurance policies. It was all win win as long as home prices kept rising. Even if they didn't the guys running things would bank some big bucks up front and they'd be long gone if things turned.

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