Credit Default Swap

[BLAZER PROPHET]

Many people do not fully understand the mechanism for how sub prime loans damage the economy so widely. To that end, I wanted to post to this website about CDS's. It's both a good read and some of the comments are also good.

http://www.economicshelp.org/blog/933/finance/credit-default-swaps-explained/

 

[BLAZER PROPHET]

Here's a better video.

 

[huevonkiller]

Great stuff. :O

 

[maxiep]

Just think of it as insurance. We in finance world like to make things seem more difficult than they really are. That way, we put up another barrier to entry.