SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Politics for Pros- moderated
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Neeka who wrote (296638)3/16/2009 4:05:17 PM
From: Nadine Carroll1 Recommendation  Read Replies (1) of 793970
 

I am wondering if we (U.S.) is actually paying back loans to foreign banks? Is this what is really happening?

It's not loans, it's insurance payments. The European banks bought enormous quantities of derivatives, both mortgage based and collateralized loan obligations, which were all rated AAA because AIG had insured them with credit default swaps. Many of the derivatives have dropped in value because of the toxic assets they are partially based on, and now AIG has to begin paying on the insurance it sold. But it had no reserves to pay out CDS claims, because it wasn't required to have any. So that's where the bailout money is going, to pay the claims.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News