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Senior Contributor
425Cat
Posts: 1,502
Registered: ‎05-14-2010
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derivatives and credit default swaps

Research them and the role the big banks are playing. Good article on barnhardt.biz. the clock is ticking on fhe next meltdown
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jrsiajdranch
Posts: 2,118
Registered: ‎05-03-2010
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Re: derivatives and credit default swaps

Well it is a big deal not sure it is gonna be the c change that the last time was. I think something else bigger takes us down. I would also be watching for a big fallout last weeek of Sept. or last week of Oct. When that hits commodities are gonna get rifled thru so fast we won;t know what hit us. As soon as the equities start to turn this stampeed will not stop till it has sucked all the dollars outa everything. I really think this may be a bellweather fall. Our great depression is about to be here.

Senior Contributor
farmerguy89
Posts: 1,012
Registered: ‎06-30-2012
0

Re: derivatives and credit default swaps

Lol!! What do you think puts, calls, and futures are???? Basis contracts? Forward contracts?? They're derivatives. Makes me crack up inside here
Senior Contributor
425Cat
Posts: 1,502
Registered: ‎05-14-2010
0

Re: derivatives and credit default swaps

Dig deeper farmerguy and you will understand.
Senior Contributor
farmerguy89
Posts: 1,012
Registered: ‎06-30-2012
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Re: derivatives and credit default swaps

I know what CDS are. The problem was, as I understood it, was that people made loans and wanted to offset their risk of their clients defaulting. In order to do that, they would use cds derivatives.

Now the credit rating agency got carried away and was giving everyone and everything a aaa rating. Even when the lender was garbage. Unfortunately, many cds bet that big banks couldn't fail. And usually cds were tied to big aaa banks that failed. When the bAd loans and unpaid CDS came to light, no one could get paid.

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jrsiajdranch
Posts: 2,118
Registered: ‎05-03-2010
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Re: derivatives and credit default swaps

Don;t blame big banks without blaming big Governement. Also remember that this time the American Taxpayer is on the hook for the "insurance".

Senior Advisor
kraft-t
Posts: 10,784
Registered: ‎05-10-2010
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Re: derivatives and credit default swaps

That is interesting.. Why would you blame the government? The banks were the ones that offered shoddy loans, bundled them and pressured the ratings agencies into bogus credit rating and then sold them to unsuspecting investors. There is enough blame to go around but the governments real mistake was not giving those high rollers Jail time. Lotz of it.

Senior Advisor
kraft-t
Posts: 10,784
Registered: ‎05-10-2010
0

Re: derivatives and credit default swaps

Your definition is most assuredly correct!

Senior Advisor
kraft-t
Posts: 10,784
Registered: ‎05-10-2010
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Re: derivatives and credit default swaps

The ratings agencies were pressured into giving hyped up ratings. If tha banks were not satisfied with a rating they would offer the business to another rating company. Thus if a rating company wanted the business they came into compliance with the bundlers expectations.

 

In other words the ratings companies prostituted themselves in the pursuit of business.

Senior Contributor
425Cat
Posts: 1,502
Registered: ‎05-14-2010
0

Re: derivatives and credit default swaps

Big banks were fixing libor against the credit swaps to their favor