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 : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (7533)1/26/2012 12:55:14 PM
From: Thehammer  Respond to of 85487
 
Yes, that is what CDO's are supposed to be a form of insurance. Problem is that AIG didn't hedge their bets. A whole lot of folks never understood the risk involved.

Thanks as well for pointing out that Bush tried on multiple occasions to reign in the problem. Much of this originated with the Community Reinvestment Act. Bottom line we are talking about a bubble and the inevitable crash that followed.The public, private sector and government all had some hand in this.

It sounded like a good idea at the time and Barney Frank kept channelling this:

bing.com



To: Jorj X Mckie who wrote (7533)1/26/2012 1:59:47 PM
From: sm1th  Read Replies (1) | Respond to of 85487
 
People talk about the credit default swaps as if they were the cause of the whole mess.

The problem with CDS is that you don't have to own the asset to buy the insurance. Its like buying insurance on your neighbor's house, then burning it down. Institutions bought CDS and then took short positions to help trigger the defaults.


HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News