A Quote by Michael Lewis
A credit default swap was confusing mainly because it wasn't really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term.
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Credit default swap is basically just an agreement that I have with you, where I sell you insurance on some bond you own. If the bond goes belly up, I promise to pay you. And as long as the bond doesn't go belly up, you pay me for selling you insurance.
Credit default swap gives you something to do. You can buy some credit default swaps from them to protect yourself against the bankruptcy of people who owe you money.
Credit-default swaps remedied the problem of open-ended risk for me. If I bought a credit-default swap, my downside was defined and certain, and the upside was many multiples of it.
The people who did the collateralized mortgage obligations, sold them to pension funds, then sold them short, then bought credit default swap insurance on them, are just amazing. They are a law unto themselves.
I'm no financial expert. I scarcely know what a coin is. Ask me to explain what a credit default swap is, and I'll emit an unbroken 10-minute 'um' through the clueless face of a broken puppet. You might as well ask a pantomime horse.
I was able to use credit default swaps to protect not only my investments but the hundreds of jobs that exist because of my investment. I understand the dangers of credit default swaps and the benefits of credit default swaps.
Thus a long term corporate bond could actually be sold to three separate persons. One would supply the money for the bond; one would bear the interest rate risk, and one would bear the risk of default. The last two would not have to put up any capital for the bond, though they might have to post some sort of collateral.
In taking out an insurance policy one pays for it in dollars and cents, always at liberty to discontinue payments. If, however, womans premium is a husband, she pays for it with her name, her privacy, her self-respect, her very life, until death doth part.
I do not allow myself to suppose that either the convention or the League, have concluded to decide that I am either the greatest or the best man in America, but rather they have concluded it is not best to swap horses while crossing the river, and have further concluded that I am not so poor a horse that they might not make a botch of it in trying to swap.
I would not swap the World Cup title for any accolade. But I could imagine that quite a few would swap every accolade for a World Cup title.
A credit derivative, at its core, is actually a very simple concept... The simplest way to think of a credit derivative is it is analogous to insurance against the risk of a credit default by your counterparty, your business counterpart.
I think the credit default swaps can take the place of the rating agencies who really have missed the ball in this procedure and are quite conflicted by the way the ratings are paid for. So, I would like to see credit default swaps become an evermore important way of understanding credit risk in the economy.
The premium tax credit that is in the Obama plan is exactly that - it is a tax credit, and it isn't cash. It is a discount on the amount that you pay for an individual policy based on your family size and your income.
I love engaging in conversation with other moms because we can relate to one another, and we swap valuable insight and information.
When you're setting up a budget, a general rule is to start with your fixed expenses - your housing and insurance payments, and car payment, if you own one.
As you know, in the latter part of 2008 and early 2009, the Federal Reserve took extraordinary steps to provide liquidity and support credit market functioning, including the establishment of a number of emergency lending facilities and the creation or extension of currency swap agreements with 14 central banks around the world.
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