CDS's were treated like puts but at just a fraction of the cost. Thus, allowing someone a lever with which to fund the short sales on a security.
"The fact that CDS allowed you to effectively short a credit you didn’t own was not particularly harmful." Yeah, right. If it was not harmful, there shouldn't be a relationship precrash to the number of CDS's on a company and the eventual outcome for said company.
Are CDS a Good Thing? [View article]
On Apr 26 07:42 PM William Cowie wrote:
> Can someone prove a CDS is different from a simple insurance policy?
If I game the system on an insurance company it is called Fraud. If you game the system with a CDS and shorting it is ignored.
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Are CDS a Good Thing? [View article]
"The fact that CDS allowed you to effectively short a credit you didn’t own was not particularly harmful." Yeah, right. If it was not harmful, there shouldn't be a relationship precrash to the number of CDS's on a company and the eventual outcome for said company.
Cramer's Mad Money - AIG, Show Me the Money (11/20/08) [View article]
Hyperinflation, Here We Come [View article]