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Politics : Politics for Pros- moderated

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To: carranza2 who wrote (296715)	3/17/2009 1:53:33 AM
From: Nadine Carroll	1 Recommendation Read Replies (3) of 793914

The real outrage is that CDS payoffs are much larger than the value paid for them. Isn't this the usual nature of an insurance claim? I'm missing the distinction between insurance and betting that you seem to be making. Some of the CDSs were bought as 'bets' by the few smart guys who understood that the system could fall down, but most I think were bought as insurance for a derivative, usually by a bank or municipality who was assured that they were buying AAA rate instruments on that basis. How you propose to tell one from the other I don't understand.

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