There is nothing wrong with CDS, they are simply insurance contracts. The problem is that AIG, in its greed, underwrote too many of them for, unfortunately, too little money because of the bad advice it got from credit rating agencies.
The hubbub about the bonuses is just political posturing to have the herd look the other way while it is being slaughtered. The roughly $170 million are a pittance (less that 1/10 of 1%) next to the $170 billion dollars sank into this jalopy.
Generally, the Government can't deprive persons of property without due process and can't take private property for public use without just compensation.
On Mar 17 05:01 PM Mike Hydes wrote:
> What would happen if Congress just invalidated these credit default > swaps? > > If they can do that then why has it not been done?
Why AIG Wasn't Allowed to Fail [View article]
Why AIG Wasn't Allowed to Fail [View article]
Why AIG Wasn't Allowed to Fail [View article]
On Mar 17 05:01 PM Mike Hydes wrote:
> What would happen if Congress just invalidated these credit default
> swaps?
>
> If they can do that then why has it not been done?