willbeurdaddy -> RE: Democrats will hold the House and Senate (10/5/2010 5:18:00 PM)
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ORIGINAL: Politesub53 quote:
ORIGINAL: willbeurdaddy So you think the buyers of CDS didnt pay for them and lose real money? Dont make me explain the real world to you. Dear oh dear, this is getting to be too easy for me. If the CDS`s had been paid for, there wouldnt have been a crisis like we saw. Most CDS have a long term maturity range, often no payment is required for ten years, that alone makes it electronic money. If you really think all the buyers of CDS were in a position to pay up, you need to think again. Part of the problem is a CDS is like insurannce credit, but without any govt regulations. Most CDS were whats called naked credit default swaps, very risky and hard for buyers to understand what they were getting into ( Read a book called F.I.A.S.C.O ) So yes, despite your comment to me about the real world I am in, not all buyers paid for CDS contracts, hence the mess. You are either dont understand the transaction or are intentionally obfuscating the issue. It doesnt matter whether they were naked contracts or not. A CDS is quite simply an insurance policy. Premiums had to be paid to purchase that insurance. Like life insurance policies some are single premium, some have periodic premiums. Regardless of the term, the premium has to be paid in real money. Nonody gave away insurance policies for nothing.
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