So,the 21st, is D-Day. The truth will set us free. Short selling going to be outlawed on the 20th again? These Texas boys are pretty good at picking the publics pocket. Kenny Lay, Phil Gramm, George Bush, not bad for a bunch of "good ol' country boys". Why is it so hard to find out the truth? Why did they let Lehmans go down? The truth, please? Someone.

Sen Phil Gramm's name comes up yet again. I believe he has a doctorate degree in economics. Too bad he tested his economic theory on a whole country, rather than a small group. After leaving the Senate, 2004 or 6, he became a lobbyist for the banking industry. Since this CDS thing popped up a few weeks ago, I have compared it to Enron and its demise - futures trading in "hot air." Appears similar. Senator Gramm's wife was on the Enron Board of Directors.
Mentally, I changed my political inclinations three weeks ago from Republican to just being independent, altho I will vote for McCain. Obama just doesn't have a broad enough track record to judge what kind of president he would be. He tell us what he will do, but there is not a whole lot to look back at for him.
My opinion is that Senator Gramm's elitist arrogance is exactly what is wrong with Republican Party these days.

Hello to the writer and community.

Try blaming " BARNEY Frank" whom actually didn't allow the Republicans to change those Rules back..when they realized their faults.Mr Frank has been resposible for this Financial turmoil along with FNM/FRE...and the Democrats wanting Homes for everyone..even though they had no " Down payment" money..And the CDS/CDO market wasn't Regulated as you point out..I'm sure many Democrats in congress,and on Wall Street Profitted from this Corrupt practice! to lay blame on phil gram is like blaming Einstein for creating Nuclear bombs..it's not the bombs that kills you..but those whom USE such things for hurtful/ Greedy purposes,in this case to do Harm to others,with no Willful regard for the "LAW"or paying back the CDO/CDS that they knew like a Huge Gamble never could be traced..or Punished should anyone whom seeks to Uphold those covenants to a Moral,Legal or Financial Standard as was Assumed by those whom Entrusted " Trillions" of Mortage insurance to, as IS Still the case on Wall street.
For you to Suppose GREED was phil grams Fault is laying blame on one mans Feet where Many have Tred and schemed whilst duping the SEC,FED,Bankers..and Americans into believing the SCAM/Leverage Rates which left unchecked as was the Case would have little effect beyond some writers opinion that he teaches that one man was responsible for said problem to be a Complete joke as to the Arrogance of That Writers opinion of his own Competancies about the subject.!
God Bless America
Happy Trails

Extraordinary times call for extraordianry measures.

Why not "put a hold" on any type of payouts for the CDSs . . . and see where the damage surfaces?

Then, why not try to "unwind" the CDS mess by negating the payments for CDSs; and requirng that ONLY the premiums be returned. Somewhat akin to an insurance company only having to refund the customer's premiums in the event of "fraud". wouldn't this mitigate the overall damage; and more simply contain the amount of the damage to those who took the irresponsible risks in regards to the CDS "investments"?

Yes, that may be radical; but isn't that more "sane" than continuing to further scramble this economic mess? and it would relieve some of the burdens on the tax payers, irght? Whatever happened to "the liabilities being commensurate to risks of the investments"?

The government and the corporations are merely trying to foist the losses off onto the taxpayers.

What a totally irresponsible article fraught with misinformation. If in the event of a default by the bond issuer, the CDS insurers could simply cover the defaulted $1 billion (or portion thereof) and thus eliminate the $100 billion payout as Mr Cohan claims.

The $250 billion addition to bank capital announced on Monday will not hit the system for 21 days from Monday. One of the loan provisions is the federal government gets stock warrants for 15% of the loan based on the trailing 20 day stock price. With the huge jump in financial stocks on Monday, it would be irresponsible for the institutions to borrow until their trailing 20 day price reflects the current higher values.

Is there little doubt Mr. Cohan is a Democrat with his carefully orchestrated political plug at the end. How is it that these writers always omit the fact that there has been a Democratic congress during most of these events, that has done nothing until this mess got out of hand. Congress is mostly at fault so let's get some of those Democrats out, and quickly, should Obama get elected.

Hey Pete, You want some cheese with that whine?

This article sucks, Don't forget to vote? You have a choice between a naked marxist with ties to Islamic type terrorists or and an American war hero that will keep taxes and Islam in check. Any other questions?

Obama is the only hope for America. We will save billions to move out from Iraq. Its the change we all call for. Redistribution of wealth and heavy taxing on billionaires. Instant saving will be if Obama can talk to Islam we can drop all security which cost trillions. Obama represent working class the, other one the millioners. He is already one.

I'm sure that Secretary Paulson knows that his pension payor, Goldman Sachs, is on the hook for billions in credit default swap investments, particularly if AIG goes down. That's a hopeless conflict-of-interest that has never been divulged to the taxpayers.

$400 billion?

Try $6-8 billion after everything is netted out. See:

http://www.independent.co.uk/news/business/news/lehman-cds-auction-fears-allayed-960345.html

Yes , we can blame everyone from the president on down. Where was congress on this ?
Barney Frank makes me laugh, he`s always ready to fix some thing when it`s to late.

The global governments can, at the stroke of a few dozen pens, invalidate any CDS contract that is not insuring a real asset. Those "naked" contracts are pure gambling. If you can't tender back the depreciated asset, they you don't get the insurance payout.

"Those "naked" contracts are pure gambling. If you can't tender back the depreciated asset, they you don't get the insurance payout. "

For us that don't understand these financial matters, these comments are valuable.

But we maybe able to help with insight on future electric production.

http://home.comcast.net/~bpayne37/pnmelectric/altreport/altreport.htm#altreport

Cintos - many of the 'naked' contracts were probably gambles on failure. But some were reinsurance -- i.e. if I (or my risk manager) determine I've insured too much of company A's debt, I can buy CDSs on company A to reduce my exposure. Due to the reinsurance netting out much of the exposure, the settlement will be much less than Doomsday Peter suggests, as Simon's Independent article explains.

If those contracts were to be cancelled, the reinsurance would be lost and some companies that managed their risk would be hosed.

I did a stupid thing by buying a Lehman Holdings Bond, purchased thru H & R Block. Any chance CDS will cover this?

obviously oblivious thomas has no clue...the whole bunch watched as they saw financials being plundered!!all experts?!!!I don't have an economic or history degree but have understanding enough to know that where i researched in past ten years saw this coming by known economists and historians. We were all taken to the cleaners!!! AND THEY THE GOVT along with financial crooks were in collusion....COME ON!!!WE ARE IN DEEP U KNOW WHAT!!!!

The Real "Other Shoe--About To Drop" Is The High Credit Card Debt, Maxed Out, And Carried Month To Month, By Americans Who CAN NOT POSSIBLY Ever Re-Pay The Balance. And Enslaved To Ridiculous High Monthly Interest Rates, To Carry That Balance--Talk About "Un-Secured Debt!, Many Home Owners--Very Current On Their House Payment--Are In Debt To Credit Card Heaven, With No Possible Way To Ever Clear Off That Balance, or MANY Balances, More Importantly How Much Of This--Are The Banks Carrying As FULL VALUE?
EMIL J KOVACH JR

Can someone tell me please if the following is possible:

Company A sells insurance on company B which fails. Company A does not have the resources to pay out the insurance so it goes belly up. During the same time company C insures against company A which has now failed...it can not cover so it goes belly up. Then D fails for it's covering of Z...etc, etc. , etc.

Am I way off base here? Sorry this whole thing is very confusing to me.