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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Step1 who wrote (165110)	6/16/2009 7:45:58 PM
From: robnhood	Respond to of 313182

It is like everyone on your street being able to purchase fire insurance on your house. Many more CDS were sold then there were underlying bonds. Firms Like Goldman Sachs purchased tons of CDS off of AIG on all kinds of instruments that they did not own. Essentially a bet that the underlying would fail. ( helped along by shorting the shit out of the stock) The US taxpayer has made good on all of these bets even though firms like Goldman were well aware that AIG would not be able to honour their commitments. IMO.

To: Step1 who wrote (165110)	6/16/2009 7:52:26 PM
From: robnhood	Respond to of 313182

<<but hey, maybe this is the perpetual energy machine...>> It sure was treated as one until the SHTF. Actually they are still allowed. You can buy CDS on US treasuries. No need to hold the underlying bonds. Who I ask will be able to honour that CDS should the US fail?