What about the 60 trillion worth of credit default swaps oput there in the world???
This 60 trillion dollar figure is twice the gdp of the US, UK, EUROPE and Australia all combined from memory
Ok so the US wont let its banks go down, and neither will europe etc
But if the CDS market gets out of hand, what will happen and whom will pay all that money??
the 700 billion raised surely couldnt deal with the CDS defaults could it??
Lehman bros owed an outstanding 660billion in CDS from what i read (from memory) and thats a big reason why they went bankrupt
****** Ok say theres gonna be a 10% default on 60 trillion bucks
thats 6 trillion right??
The US needed nearly 1 trillion because of the CDO problem and money to invest into banks
Surely theyll need ANOTHER bailout package number 2 for the CDS problem??
If theres 10% default theres 6 trillion outstanding insurance that needs to be paid
I guess every country will need to raise more money for their bailouts to solve this problem if it gets out of hand???
The insurance giants like AIG cant handle this CDS problem
They simply didnt have enough assets backing them to issue so much of this 'insurance'
They didnt need to, coz there was little or no regulation re CDSs.
What do you guys think??
Or am i making this CDS mess bigger than what it is
I guess SOME of the 700 billion is goes towards helping institutions like AIG MBIA etc balance sheets, but it also has to accomodate the CDO problem and failed mortgages etc
I think 700 bill wont be enuff with the CDS mess
what do u think???
Again , 10% default equals 6 trillion bucks in 'insurance'
the CDSs cover mortage default, commercial bonds default, even commercial property and rent/lease defaults
the GREEDY bastards wrote this stuff on everything just to collect premiums , but without the necessary ASSETS backing potential claims
i cant believe the regulators/FED etc would let this happen
what do u guys think of the CDS problem - if it were as massive as I think, why such a huge volume driven rally???
