Simply stated a credit-default swap, or CDS, is a way for the owner of an asset like a bond to buy an insurance policy to protect themselves in the event the issuer of that bond defaults.
But, because the CDS market is unregulated, there is $60 trillion of so in these instruments that are not only purchased by actual owners of the debt, but by speculators betting that the issuing entity will indeed go out of business.
When the economy was “good” and there was little incidence of company’s defaulting, banks sold and took in the premiums with what seemed to be very limited risk. Limited risk because the chance that the company or country issuing the debt would go under was somewhat remote.
The banks would therefore take in premiums and for the most part not have to pay out “claims” on the defaulted paper that they had insured through CDS. Premiums, as the chart below the video shows, are commensurate to the perceived risk that the debt issuer may actually default.
Read the rest of the story and the chart of sovereign debt CDS at The Economic Spy here.
Q Why did the USA allow foriegn banks to use the FED's discount window
ReplyDeleteA To prop the european banks up so new CDS could be made with a low premium
Q Why do that
A So US banks could place $200bn in short bets against a europen bank only worth $1bn
Q Do they not need to own the european bank to do that.
A No
Q Could this be seen as an act of war
A The people in Greece would say so
Q Who's next
A Ireland but it should be the zionist bankers
Q What should i do
A Get out of bonds before we see debt forgivness across the board on goverment bonds.
Q What else can i do.
A Buy silver/gold and store water and food.
Just like the $2.3tr that went missing before 9/11 and buildings fell over, gold went missing and the short bets on airlines the FED will tell us that none of this money is traceable.
You have been warned !
So what you are saying is that bankers, all of whom you believe are Jewish, should be forced to pay a price?
ReplyDeleteWhat kind of a price?
What's your name?
Do you represent any group?