The American People Paid Off The Bets (Credit Default Swaps) Of Wall Street Investment Banks–Videos

Posted on October 20, 2010. Filed under: Blogroll, Communications, Economics, Energy, Federal Government, government, government spending, history, Investments, Language, Law, liberty, Life, Links, People, Philosophy, Politics, Rants, Raves, Regulations, Resources, Security, Technology, Video, Wisdom | Tags: , , , , , , , , , |

Derivatives Warning – Michael Greenberger interview


Credit Default Swaps


Greenspan Admits Philisophical Error in “The Warning”


Late 90s fight to regulate derivatives (clip from BBC’s “The Love of Money: The Age of Risk”)


Financial Derivatives: What are They? – Housing Bubble Collapse – Unregulated Insurance


Derivatives: the most crucial aspect of financial regulatory reform


CHHS Director on CNBC’s “Goldman Sachs: Power and Peril”


Goldman Sachs-Robbing and Thieving The American Sucker-AGAIN

The Young Turks: Fraud Exposed At Goldman Sachs


Background Articles and Videos

The Fall of Lehman Brothers P1

The Fall of Lehman Brothers P2

The Fall of Lehman Brothers P3

The Fall of Lehman Brothers P4

The Fall of Lehman Brothers P5

The Fall of Lehman Brothers P6

Credit Default Swap

“…A credit default swap (CDS) is a swap contract and agreement in which the protection buyer of the CDS makes a series of payments (often referred to as the CDS “fee” or “spread”) to the protection seller and, in exchange, receives a payoff if a credit instrument (typically a bond or loan) experiences a credit event.

In its simplest form, a credit default swap is a bilateral contract between the buyer and seller of protection. The CDS will refer to a “reference entity” or “reference obligor”, usually a corporation or government. The reference entity is not a party to the contract. The protection buyer makes quarterly premium payments—the “spread”—to the protection seller. If the reference entity defaults, the protection seller pays the buyer the par value of the bond in exchange for physical delivery of the bond, although settlement may also be by cash or auction.[1][2] A default is referred to as a “credit event” and include such events as failure to pay, restructuring and bankruptcy.[2] Most CDSs are in the $10–$20 million range with maturities between one and 10 years.[3]

A holder of a bond may “buy protection” to hedge its risk of default. In this way, a CDS is similar to credit insurance, although CDS are not similar to or subject to regulations governing casualty or life insurance. Also, investors can buy and sell protection without owning any debt of the reference entity. These “naked credit default swaps” allow traders to speculate on debt issues and the creditworthiness of reference entities. Credit default swaps can be used to create synthetic long and short positions in the reference entity.[4] Naked CDS constitute most of the market in CDS.[5][6] In addition, credit default swaps can also be used in capital structure arbitrage.

Credit default swaps have existed since the early 1990s, but the market increased tremendously starting in 2003. By the end of 2007, the outstanding amount was $62.2 trillion, falling to $38.6 trillion by the end of 2008.[7]

Most CDSs are documented using standard forms promulgated by the International Swaps and Derivatives Association (ISDA), although some are tailored to meet specific needs. Credit default swaps have many variations.[2] In addition to the basic, single-name swaps, there are basket default swaps (BDS), index CDS, funded CDS (also called a credit linked notes), as well as loan only credit default swaps (LCDS). In addition to corporations or governments, the reference entity can include a special purpose vehicle issuing asset backed securities.[8]

Credit default swaps are not traded on an exchange and there is no required reporting of transactions to a government agency.[9] During the 2007-2010 financial crisis the lack of transparency became a concern to regulators, as was the trillion dollar size of the market, which could pose a systemic risk to the economy.[2][4][10] In March 2010, the DTCC Trade Information Warehouse (see Sources of Market Data) announced it would voluntarily give regulators greater access to its credit default swaps database.[11]


Center for Health and Homeland Security (CHHS) Director on NBC Nightly News – 3/17/09

Center for Health and Homeland Security (CHHS) Director on CBS Evening News – 3/26/09


Center for Health and Homeland Security (CHHS) Director Michael Greenberger on ’60 Minutes’ – Part 1


Michael Greenberger Talks Speculation In Commodity Markets


Center for Health and Homeland Security (CHHS) Director Michael Greenberger on ’60 Minutes’ – Part 2

Credit Default Swaps 2


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