I had no clue what a CDS was 2 months ago. Now, with my home having lost 40% of it's value (which I bought at the peak of the local Phoenix bubble in Aug 2007) and a worthless mortgage with negative equity, I know what they are and despise their very existence. All those times my mortgage was sold and resold to other lenders... it wasn't just me, it was every freakin mortgage in the US being swapped and traded. 'Not my problem if the home owner doesn't pay it back, I sold the damn thing!' the original lender could claim. I understand better now, how they became such a massive over-indulged fiscal orgy by the deregulation Republicans who amended the bill that started the feeding frenzy. MBS swaps look like venial sins in an environment of CDS Caligula-esque blood lust. Thank's Phil Gramm!
It's asinine. Matt Taibbi states is very well here in refuting the National Review's Byron York:
"The CDS market, this market for credit default swaps that was created in 2000 by Phil Gramm's Commodities Future Modernization Act, this is now a $62 trillion market, up from $900 billion in 2000. That's like five times the size of the holdings in the NYSE. And it's all speculation by Wall Street traders. It's a classic bubble/Ponzi scheme. The effort of people like you to pin this whole thing on minorities, when in fact this whole thing has been caused by greedy traders dealing in unregulated markets, is despicable."
"S.3283, co-sponsored by Gramm, along with Senators Tom Harkin and Tim Johnson" ...and "the 262-page amendment Gramm tacked on to that bill that deregulated the trade of credit default swaps."
Look it up. It's despicable. Yeah, I'm just "a whiner". "Our economy's never been stronger". Grrrrrrrrrr.
1 year ago