Since the economic markets started imploding in a major way earlier this year we’ve hear a lot about about “credit default swaps” (CDS). I’ve seen a few attempts to explain what these particular financial tools are but still didn’t feel like I had a good grasp on what they were.
Last night 60 Minutes had a segment on CDS (The Bet That Blew Up Wall Street) which I think does a pretty good job of spelling out what these beasts are. The audio is pretty poor, but it’s worth the 12 minutes and 26 seconds to watch:
After seeing this it seems pretty clear that the limitations the government removed eight years ago was not really a good idea. Not one Senator voted against it. Anyone know if they’ve learned their lesson and moved to make this illegal again?