SocraticGadfly: Bailout doesn’t address default swaps

September 30, 2008

Bailout doesn’t address default swaps

They’re known as an “Ebola virus,” in the words of story author Nicholas Varchaver, “essentially the dark matter of the financial universe,” by quoted hedge fund manager Chris Wolf.

In essence, they’re an “Intrade” of sorts that propped up the various forms of mortgage-backed securities for several years now, and are at the heart of the current financial mess.

And, Crazy Uncle Henry’s Damaged Derivatives Dump does nothing about them.

Read the whole story to learn more about what’s at stake.

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