Isnt that because LEH was forced into BK causing all these CDS to become worthless? Seems the government thinks this was a mistake & wants to backstop the rest of these losing lottery tickets with a 100% payout. The point of the article is that this is what needs to be done with AIG, Citi etc, force bk so all these lottery tickets are wiped out. Instead the government wants us ,the taxpayer, to be on the hook for trillions to whoever holds these "winning" lottery tickets.
Interesting thoughts AC. But unless you live high in the Andes or on a different planet you are on the inside of this mess looking outwards just like the rest of us. regards f9
The only way to "win" is to have the entity default or go bk(like LEH). Then the CDS holder(aka shorter) is paid out. Otherwise the contract lives on until the end of its term and the writer pays an annual fee to the holder. http://en.wikipedia.org/wiki/Credit_default_swap Perhaps Obama will try to keep all the balls in the air until the bulk of the CDS's expire??
I read AIG had the biggest short position on silver out there. Now why would an insurance company want to be in the business of selling silver it doesnt even have.... Croocks the lot of them.
Neuf-sans-peur, physical gold and a healthy stock of .357 magnum cartridges provide some modest insulation. I look forward to the return of the righteous ante-bellum days of barter, chattel and slavery after the crash.
CBS did a great story on CDS's and estimated unregulated CDS market is at least 50 to 60 trillion. http://www.cbsnews.com/stories/2008...es/main4514163.shtml?source=RSS&attr=_4514163
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