Credit Default Swaps (CDS) Intro

Introduction to credit default swaps and why they can be dangerous

Category:

Education

Tags:

• credit
• default
• swaps
• CDS

[mnmmoose14]

isnt this partly why the economy sucks?

[khanacademy]

@mnmmoose14 yes

[Lern2Read]

are this video and the one about CDOs inspired by a reading of Michael Lewis' The Big Short? i read it in the spring and half the book seemed to be either "credit default swaps" or "CDOs"

[SalsaTiger83]

@DavidAKZ You're arguments are very fuzzy, care to elaborate or be more specific? Financial prices are random walks. And yes, price doubling because of randomly changing public information of basic supply and demand fundamentals is quite possible, especially if you factor in complex systems theory. I don't disagree, markets have to be regulated a lot more, but people just don't understand. You apply hate and ignorance to a problem that needs deeper understanding.

[DavidAKZ]

@SalsaTiger83 in financialised futures markets (agriculture for example) where you can borrow an infinite supply of $ @ 0.25% - risk management is for peasants. Do you think the price of wheat has doubled in a year because of supply and demand fundamentals ?

The Wicked Witch Is Nervous (Google Blythe Masters)

watch?v=Lq0bAOVaQwQ&feature=re­lated

[SalsaTiger83]

@DavidAKZ Funny, he actually says there was some fraud in the past (Duh...) ... but if you want to stay ignorant and poor, you're welcome... I think communism failed every time because they didn't get corruption or risk management right, especially not in agriculture, where it is most obvious that you need solid risk forecasting.

[DavidAKZ]

@SalsaTiger83 I'm not sure the quantification of risk is important to criminals.

Greenspan Admission

watch?v=731G71Sahok&feature=ch­annel_video_title



[comecra85]

Well it is a good video. But you have already covered this concept in your previous videos.

[SalsaTiger83]

@DavidAKZ please reframe that request. I don't assume you think that a system that works extremely well must never fail sometimes.... If you mean where the value added of financial markets as a whole lies, try to experiment with the "gambler's ruin" idea, ideally with Monte Carlo simulations and learn why accurate risk assessment is crucial for even the most basic growth curves.

[DavidAKZ]

@SalsaTiger83 please explain the value in terms of the so called Global Financial Crisis

[DavidAKZ]

@trexx32 well you have to borrow and be a gambler. Please do not try to work and save for a living

[DavidAKZ]

@etzel33 +1