Friday, October 31, 2008
Are CDS an innocent scapegoat in this crisis
This crisis is due to rotten mortgages not CDS - "Perhaps the biggest misperception about the CDS sector is its role in today’s financial crisis. The root cause of the financial sector’s woes is too many bad mortgage loans. While some observers point to AIG’s use of CDS as contributing to its downfall, the truth is that the company, like others, took on the risk of too many defaulting mortgages and troubled loans. " CDS market doing ok - "While cash, securities and money markets have seized up, the CDS business still operates."