tag:blogger.com,1999:blog-8565634376916064143.post662247352633783584..comments2023-06-11T13:34:43.036+00:00Comments on Under the Eldritch Tree: Credit Default Swaps--UNREGULATEDUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8565634376916064143.post-15266553222619140202008-10-08T01:05:00.000+00:002008-10-08T01:05:00.000+00:00And, no, I have no mortgage insurance (PMI) nor mo...And, no, I have no mortgage insurance (PMI) nor mortgage. My house is paid for. I have no credit card debt nor outstanding loans.Doc Rockhttps://www.blogger.com/profile/07493409113882770314noreply@blogger.comtag:blogger.com,1999:blog-8565634376916064143.post-29289589145781820592008-10-08T01:03:00.000+00:002008-10-08T01:03:00.000+00:00The problems with CDSs that Avatar did not address...The problems with CDSs that Avatar did not address are 1) they are unregulated; 2) they did not require any reserves to assure payments; 3) they could be bought by speculators who did not have a dog in the fight--i.e., if I had a million dollars and wanted to buy a CDS to speculate on AIG or Goldman Sachs, or Lehman Brothers defaulting, I could. So when a trillion dollars went into default there were CDS amounting to nearly 6o trillion dollars; and 4) these were bought and sold in secret so no one could judge what the magnitudes of risk were! Secrecy, i.e., lack of transparency, and speculatory buying on selling (i.e., betting CDS) which were not a useful or necessary part of the process Avatar describes, brought the house of specualtory cards down.Doc Rockhttps://www.blogger.com/profile/07493409113882770314noreply@blogger.com