Would you bet your Home in a Poker Game?
Hell, No!!
Well, Wall Street's Investment Bankers and Hedge Funds have.
(made bets on YOUR Mortgage)
Of course those Mover's and Shaker are no dummies --
they have also taken out Insurance on all those bets.
(Most of them realize what a Scam all those Sub Prime Mortgages were ...)
You can only Inflate a Balloon so for before it eventually EXPLODES ...
If you were expecting imminent Financial Disaster, wouldn't you take out some insurance, too?
(Say about $45 Trillion worth!!!)
New York Times
Arcane Market Is Next to Face Big Credit Test
By GRETCHEN MORGENSON -- Feb 17, 2008
Few Americans have heard of credit default swaps, arcane financial instruments invented by Wall Street about a decade ago. But if the economy keeps slowing, credit default swaps, like subprime mortgages, may become a household term.
Credit default swaps form a large but obscure market that will be put to its first big test as a looming economic downturn strains companies’ finances. Like a homeowner’s policy that insures against a flood or fire, these instruments are intended to cover losses to banks and bondholders when companies fail to pay their debts.
The market for these securities is enormous. Since 2000, it has ballooned from $900 billion to more than $45.5 trillion — roughly twice the size of the entire United States stock market.
(Emphasis Added)
http://www.nytimes.com/...
Click for Larger Image
Notices the 1st Steep line
that's the 50-fold Growth of that "Phantom" Insurance Market, since 2000. It GUARANTEES those high-stakes holders that NO MATTER what happens to those Mortgages they've bet on -- their OWN money is still protected!
That "Phantom" Insurance Market, is worth 6x more than the underlying Assets they are insuring -- all those Sub Prime Mortgages (the 3rd line in the graph)
Accrued Interest
How does a Credit Default Swap (CDS) Work?
April 22, 2007
Credit Default Swaps (CDS) are fast becoming the dominant vehicle for trading credit risk.
... the basic features of a standard CDS contract and why they are easier for many traders to utilize over cash bonds.
...
A CDS is a lot like an insurance policy. This is why CDS are also called protection. The spread paid by the buyer is like the insurance premium. If there is a default, the buyer is essentially made whole because s/he gets par for the bonds. Just like if you have homeowners insurance and you have a fire, the insurance policy pays you whatever your stuff is worth.
(Emphasis Added)
http://accruedint.blogspot.com/...
So if there is a "default" then the Insurance becomes Due?
So IF Investment Banks fail (they are the issuers of these Monopoly Money Policies) -- they will owe $45 Trillion on a Market on about $7 Trillion worth of Mortgages???
How is this Legal?
How did this Happen?
Is this Why the Tax Payers are expected to "Bail Out" those Investment Banks now?
EXACTLY WHO has been minding the Store, on Wall Street, for the last 8 years?
Anyone, Anyone?
What ever happened to that Elliot Spritzer guy?
(Oh that's right -- he had some "Moral Character" flaws.)
I guess in the world of High Finance in this Business-first culture, crimes of irresponsibility, prirateering, and instigating an Economic Meltdown, aren't nearly as serious as what Spritzer did, by cheating on his wife.
Learn more about this Wall Street "Shell Game":
Hedging their bets -- about exactly WHO owns your Mortgage?
someone is gonna pay the bill for this Party --
and you can bet it WON'T be the top 1%
... it never is!
