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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (466492)	3/26/2009 8:40:21 AM
From: Alighieri	Read Replies (1) \| Respond to of 1574109

I've wondered about this. Why not just make CDSs illegal and cancel the lot of them? I've heard the financial gurus say CDSs have an important place in the market.... not sure that's true as we survived without them before they were invented ~10 years ago. Doesn't a plan that keeps the base assets from defaulting also invalidate CDSs in a sense by preventing them from being triggered? and isn't that what Geithner's plan tries to do indirectly ? Al

To: Road Walker who wrote (466492)	3/26/2009 7:52:12 PM
From: SilentZ	Read Replies (1) \| Respond to of 1574109

>I've wondered about this. Why not just make CDSs illegal and cancel the lot of them? I've heard the financial gurus say CDSs have an important place in the market.... not sure that's true as we survived without them before they were invented ~10 years ago. Yeah, we could pay a couple of trillion dollars to assume all of the underlying assets under a federal mortgage agency, give the mortgages fixed rates at which they are likely to get paid back, and then hand those mortgages over to local banks, where they actually can get to know the people who own the homes. Let the local banks collect on the mortgages while paying us enough to break even (or maybe a little less) and then they can take a profit off the top. Those local banks can hire the laid-off monster bank employees to handle those mortgages, and then we can let BoA, Citi, and the rest fail. Disaster averted. -Z