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  • AIG: How It Spent Your Tax Money [View article]
    I'm simply amazed at the blather on the idea of selling or buying "naked" CDS. Hell, the stock options markets have that available at all times for anyone. It has been done for hundreds of years with commodities. The availability of CDS did not cause the failure of any firm. The stupid pricing or mispricing has been the problem, mainly becuse there has not been a central clearing agent requiring collateral.

    Suppose Today I sell a naked puts on the 100 stocks in the Naz 100. At the same time I buy puts on the NAZ 100 index. It is an arbitrage on the insurance premiums. Does that cause AMZN to go broke? It is nonsense to suggest that it does.
    Oct 18 15:44 pm |Rating: 0 0
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