 Quote:
Originally Posted by Oldbabe
Subprime mortgages were the vehicle that the financial companies used to make credit default swaps and, therefore, bankrupt themselves. But apparently, several hedge fund managers have made like 100 billion on their bets.
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Two different things, two different problems. One compounds the other.
Large subprime mortgage exposure has threatened the solvency of certain financial institutions.
Large counterparty credit exposure among financial institutions through CDS makes the insolvency of one a potential threat to all (or many).
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