Paul Solman answers questions from NewsHour viewers and web users on business and economic news most days on his Making Sen$e page. Here’s Thursday’s query: Name: Merritt Dunn Question: Since the Treasury Department bailed out AIG and AIG had underwritten … Continue reading
- If the amount of $62 trillion is owed for credit default swaps, who or what entity eventually pays that?
Question/Comment: If the amount of 62 trillion dollars is owed for credit default swaps, who or what entity eventually pays that? Not even the U.S. government can make up for an amount which is 13 times our GDP. Paul Solman: … Continue reading
Question/Comment: You mentioned in your report that there are $64 trillion in CD swaps out there. AIG only had a few hundred billion. Who has the rest? Are there really $64 trillion of bad mortgages out there? Paul Solman: Good … Continue reading
Question/Comment: Can you explain, simply, what a credit default swap is? Paul Solman: I sure hope so. Basically, a credit default swap or “CDS” is an insurance contract to protect against bankruptcy. Say you own a lot of Ford Motor … Continue reading