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2009-03-07 Home Front Economy

Making A Bad Economic Situation Horrific

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Posted by Anonymoose 2009-03-07 00:00|| || Front Page|| [4 views ] Top

#1 What is worse is that many derivatives like Credit Default Swaps, though very useful for parties to debt, were exempted by Congress from the gambling restrictions so that parties who had no insurable interest could take them out. Thus rather than being available only to the parties to a transaction, anyone could take them out.

Then AIG when on a massive unhedged gamble to just build profits in an area they didn't understand. Now we have this debacle.

Posted by Omoter Speaking for Boskone7794 2009-03-07 00:13|| 2009-03-07 00:13|| Front Page Top

#2 Let me mark that in my book of failure for DC.

Posted by newc">newc 2009-03-07 00:20|| 2009-03-07 00:20|| Front Page Top

#3 Omoter is right. AIG and others made massive bets on low probability events. Anyone with an elementary knowledge of probability could tell you that they would make a lot of money for an indeterminate period then get wiped out.

This was like gambling with other peoples money, where you got a percentage of every win, but could walk away from the inevitable big loss.

Posted by phil_b 2009-03-07 01:06|| 2009-03-07 01:06|| Front Page Top

#4 And the Gods of the Copybook Headings said
"If you don't work, you die".

Posted by g(r)omgoru 2009-03-07 01:51|| 2009-03-07 01:51|| Front Page Top

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