Since I'm not a english native speaker, could anyone explain me why everybody blame CDS? what's wrong with them? or send a link where is explanations (understandable english) thank you very much
Credit Default Swaps are actually [supposedly] insurance against default. If they'd been named as "insurance", and regulated as such..... the premium sellers would have had to post reserves to honor their future potential obligations. As they were named "Swaps" rather than "Insurance", no such reserves were posted. Regardless of what they're called, they had no more substance than "smoke and mirrors"...