Here's how it works. Let's say there's a guy named Frank and he has a life insurance policy. When he dies, the beneficiary gets a million dollars. Now imagine a whole bunch of other people saying, "I want a million dollars if he dies, ...
http://www.npr.org/templates/story/story.php?storyId=96...
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If bad mortgages got the financial system sick, credit default swaps helped spread the illness worldwide. Like many parts of the financial system these days, credit default swaps are so complicated, simple bankers couldn't have created them...
http://www.npr.org/templates/story/story.php?storyId=96...
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Credit Default Swaps (CDS) are fast becoming the dominant vehicle for trading credit risk. In this piece, I'll go over the basic CDS also have no interest rate exposure, so someone who wants get get long or short a credit can do so without needing to work about hedging credit risk on either the short or long side.
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accruedint.blogspot.com/2007/04/how-does-credit-default...
accruedint.blogspot.com/2007/04/how-does-credit-default-swap-cds-work.html
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The CDS market was originally formed to provide banks with the means to transfer credit exposure and free up regulatory capital. As the credit default swaps market became more standardized and gained credibility, particularly following smoo...
http://www.pimco.com/LeftNav/Bond+Basics/2006/Credit+De...
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On our team at work we occasionally employ developers who know nothing about derivatives. It usually falls to me to give these guys a general introduction to the credit derivatives business. As part of that we usually have a session on what a credit default swap is and why it’s important. ... Credit Default Swaps (CDS)
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richnewman.wordpress.com/2007/12/09/a-beginners-guide-t...
richnewman.wordpress.com/2007/12/09/a-beginners-guide-to-credit-default-swaps/
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We’ve sometimes discussed the fact that credit default swaps, which effectively are insurance policies against defaults, suffer from considerable counterparty risk. ... But he also knows the markets well and isn’t afraid to show how they actually work, a rare characteristic in a famously self-boosting industry.
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www.nakedcapitalism.com/2008/02/warning-credit-default-...
www.nakedcapitalism.com/2008/02/warning-credit-default-swaps-may-not.html
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One of the big problems with standardisation is that what works as a credit event for one type of debt doesn’t necessarily work for another, and also banks have different preferences for payouts than monolines. ... Ban Credit Default Swaps? These Corporate Bankruptcies Show We Should (Money Morning, 4/22/09)
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www.nakedcapitalism.com/2008/05/warning-credit-default-...
www.nakedcapitalism.com/2008/05/warning-credit-default-swaps-may-not.html
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The next phase of the unravelling crisis in the US-centered “revolution in finance” is emerging in the market for arcane instruments known as Credit Default Swaps or CDS. Wall Street bankers always have to have ... That will not work as many of the funds won't have the cash to meet the banks' demands for more collateral.
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www.marketoracle.co.uk/Article4984.html
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Profit From Credit Default Swaps ... If you spend much time reading about the bond market, you'll come across articles mentioning credit default swaps. It's clear that they're important, but it can be hard to figure out exactly what a credit default swap is. ... Work at The Fool...
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www.fool.com/investing/dividends-income/2007/07/25/prof...
www.fool.com/investing/dividends-income/2007/07/25/profit-from-credit-default-swaps.aspx
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