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To: sm1th who wrote (7551)	1/26/2012 2:11:51 PM
From: Thehammer	1 Recommendation Respond to of 85487

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. Sounds like options to me. What institution wa s"burning down the house"? The biggest problem by far was AIG that had tremendous exposure and didn't know it. The defaults were triggered when people stopped paying their mortgages and the collateral declined in value.