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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: geode00 who wrote (142496)	10/22/2008 3:09:17 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 173976

that was from weeks ago. The swap owners had to pay out almost entirely on their contracts for the Lehman debt, which, in a bankruptcy is worthless because the debt is liquidated at whatever it is worth to pay the creditors. Didn't we talk about this once? I found out more about it. The DEBT was not worthless. But it was sold for whatever to pay the creditors in BK court so as far as the swaps were concerned the debt was almost worthless. That means the swap holders had to pay for more than they ever planned to of course, since SWAPS require no COLLATERAL! Swaps- what a crock. Insurance, but not REGULATED as insurance! How ridiculous! I guess the fear (justified) was that the swap holders would not be able to pay. I am certain SOME couldn't pay because they were hedge funds. I guess if nobody could pay the whole system would have shut down. But we are past that now. I think these swap contracts and forcing all the banks to actually pay out is why Paulson doesn't want the firms to fail, that is the issue.