Wednesday, October 15, 2008

Credit Default Swaps

Is there anyone who reads this blog (all three of you) or anyone who just happens to land here from somewhere else in the www world who can explain to me, in terms that I can understand, what the hell a credit default swap is and how it works?

5 comments:

H said...

I think it's kind of like when you play Hearts and have to pick three cards and swap with people. Yeah, I'm pretty sure it's like that. I could be wrong, though.

pj said...

You're barking up the wrong trader if you were talking to me.

Captain Crab said...

I think both of you are right on this. Now just one more semi loyal reader to get an answer from.

Gwen said...

This is Burk - A Credit Default Swap is sorta like a secured loan backed by a cash, or usually, other securities. That, more or less, is over-simplified and mostly wrong definition. Time does a better job: http://www.time.com/time/business/article/0,8599,1723152,00.html

Flenker said...

I'm pretty sure you have more semi loyal readers than I do.

And, even the explanation, I don't know what this swap thing is exactly.