algorithmbetting

A Misleading Chart on Credit Default Swaps

Correct there are equal and opposite positions to each swap. Someone loses but at the same time someone wins. But let's not lose sight of the main thrust in the referenced article.

The issue is there is a lot of financial exposure out there that wasn't around 10 years ago. I even read of a furniture company today which has large investment in headge funds. The size of the CDS market shows there are so many more entities gambling and quite simply, the more people that go into a casino, the more people will be left broke.