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A French bank says US banks have stopped lending to them. The chart shows spreads on credit default swaps (CDS) for Portugal, Ireland, Italy, Greece and Spain (the PIIGS.) CDS are psuedo insurance that big players buy and sell on the health of a company or in this case, on whether a country will [...] According to top experts, risky derivatives were not only largely responsible for bringing down the American (and world) economy, but they still pose a substantial systemic risk. Now, Bloomberg notes that the carbon trading scheme will be largely centered around derivatives. CDS were invented by Blythe Masters, who now heads JPMorgan’s carbon trading and insists [...] Bondholders who bought credit default swaps may benefit more if the company goes bankrupt. That’s because they will get paid by whoever sold them the CDS. Thus, they probably would not be interested in negotiating terms or helping the company (and its employees) survive. In this viciously predatory system, the health of the company isn’t [...] Or at least the work that financial news networks should be doing but aren’t because they’re too busy glorifying the money culture. Pseudonymous blogger prompts financial firm to freak out Zero Hedge did some digging about National Rural Utilities Cooperative Finance Corporation (CFC) and found potentially serious problems. Shortly after the post appeared, credit [...] Pond scum Goldman recommends credit default swaps against NJ, CA, WI, FL, OH, MI, others By recommending that clients buy CDS against states, Goldman is deliberately aiding and abetting the financial problems of these states in order to make a quick profit. Any concern as to the damage this will cause to those states [...] From Fortune The dollar amount of credit default swaps is greater than the world’s economic output. They started out being a way to buy insurance against debt default. But even this was sleazy. Only insurance companies can legally sell insurance. So, CDS were used as an end run around that. It got worse. CDS [...] Credit default swaps are, in effect, insurance on bonds. The seller pays the buyer a fee, the buyer agrees to pay if a default happens. However, this market is so unregulated and CDS get re-sold so often that the original seller may have trouble determining who owns it if they have a claim. Or they [...] |  | ||||
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