3 votes

What is a credit default swap? You SURE you want to know?

CDS contracts are usually explained using house insurance as an example: it is not possible to take out an insurance policy on someone else's house – because you would then have a financial interest in burning it down. Investors with no interest in the underlying bond can buy and sell CDSs – and profit from its demise.

CDSs were dreamed up in the late 1990s and became very popular, very quickly. In 2000, the market was worth $900bn (£560bn). By 2008, it was more than $30 trillion.

GOTTA LOVE THE BANKERS! AND I PAID $5 FOR A GALLON OF MILK TONIGHT. FUCKING CRIMINALS!

http://www.guardian.co.uk/business/2012/may/14/jp-morgan-los...