Who knows the difference between an CDS or MBS?

[michaelr]

Testing the waters here. I don't know what you people say or think you know.


What is the difference between the two?

What happens when one fails?

What is the initial, and investment?

[Trinnity]

This is not an area of expertise for me and I only know the basics, but I'll try.

Mortgage backed securities are traditionally very stable. After the mortgage meltdown, not so much. But I suppose they're bundled in different groups and some are inherently more stable than others. But I don't really know all that for sure.

Credit default swaps on the other hand are what brought AIG and Lehman bros down. They're insurance policies on collateralized debt obligations (cdo's). They assumed they were such a lock on profits, they didn't set aside monies in case the policies were called in. So when the mortgage meltdown occurred, they couldn't meet their obligations.

The difference is they're different types of investment vehicles, and they're different types and levels of risk.

What happens if one fails....I think I covered that by example.

The initial and the investment, well ya got me there. Don't know.

How'd I do? Did I pass with a C or an incomplete?

[michaelr]

This is not an area of expertise for me and I only know the basics, but I'll try.

Mortgage backed securities are traditionally very stable. After the mortgage meltdown, not so much. But I suppose they're bundled in different groups and some are inherently more stable than others. But I don't really know all that for sure.

Credit default swaps on the other hand are what brought AIG and Lehman bros down. They're insurance policies on collateralized debt obligations (cdo's). They assumed they were such a lock on profits, they didn't set aside monies in case the policies were called in. So when the mortgage meltdown occurred, they couldn't meet their obligations.

The difference is they're different types of investment vehicles, and they're different types and levels of risk.

What happens if one fails....I think I covered that by example.

The initial and the investment, well ya got me there. Don't know.

How'd I do? Did I pass with a C or an incomplete?

I want to give you a D, but that is only because your username is green, else you would get a D-.

I'll allow the comments to add up then answer the one by one.

[Trinnity]

Darn. Well, I tried. Sorry.

[michaelr]

Darn. Well, I tried. Sorry.

You weren't far off, I am just a hard ass.

[Captain Obvious]

Just don't ask him to define Fascism.

Just Wiki it and save yourself the trouble.

[MMC]

Just don't ask him to define Fascism.

Just Wiki it and save yourself the trouble.

Heya Cap WB bro.....Glad you can stop in from time to time.

[Goldie Locks]

Just tell us what you know and we'll go from there. I guess I can look it up and copy and paste.

[michaelr]

Just tell us what you know and we'll go from there. I guess I can look it up and copy and paste.

What i know is they are fixing to freeze these things. The fallout from that will be radical.

The EU and US banks got caught fixing rates.

I stand on the fact that sovereigns will lose control of those rates.

I work on the premise that inflation and rates become hyper-parabolic, one feeding of the other until its very foundation crumbles.

A freeze on the CDS facilitates this in short order.

The LIBOR rate scandal facilitates this.

Read this....Big Banks Have Criminally Conspired Since 2005 to Rig $800 Trillion Dollar Market (http://www.blacklistednews.com/Big_Banks_Have_Criminally_Conspired_Since_2005_to_ Rig_%24800_Trillion_Dollar_Market_/20339/0/0/0/Y/M.html)

and this.... Bankers constantly lying, defrauding; most still not in jail (http://www.salon.com/2012/07/02/bankers_constantly_lying_defrauding_most_still_not _in_jail/)

It is because JP and others don't just hold debt, but they own and manipulate the CDS and the MBS that is the liability.

Did that help?

Umm...the LIBOR is the actual rate that fixes bank rates. If one loses confidence in that then it is over pronto like.

[Goldie Locks]

What i know is they are fixing to freeze these things. The fallout from that will be radical.

The EU and US banks got caught fixing rates.

I stand on the fact that sovereigns will lose control of those rates.

I work on the premise that inflation and rates become hyper-parabolic, one feeding of the other until its very foundation crumbles.

A freeze on the CDS facilitates this in short order.

The LIBOR rate scandal facilitates this.

Read this....Big Banks Have Criminally Conspired Since 2005 to Rig $800 Trillion Dollar Market (http://www.blacklistednews.com/Big_Banks_Have_Criminally_Conspired_Since_2005_to_ Rig_%24800_Trillion_Dollar_Market_/20339/0/0/0/Y/M.html)

and this.... Bankers constantly lying, defrauding; most still not in jail (http://www.salon.com/2012/07/02/bankers_constantly_lying_defrauding_most_still_not _in_jail/)

It is because JP and others don't just hold debt, but they own and manipulate the CDS and the MBS that is the liability.

Did that help?

Umm...the LIBOR is the actual rate that fixes bank rates. If one loses confidence in that then it is over pronto like.

Yes, now that makes sense....TY for clarifying.

[michaelr]

Yes, now that makes sense....TY for clarifying.

It is a house of cards. When the CDS(insurance on derivatives) fail or if there is a freeze on their trade, then everything related fails, and that everything is everything.

[Goldie Locks]

It is a house of cards. When the CDS(insurance on derivatives) fail or if there is a freeze on their trade, then everything related fails, and that everything is everything.


Yes, and I believe it will happen.

[michaelr]

Yes, and I believe it will happen.

You should.

The first CDS that failed was the MBS here, then the same securities got the nations of PIIGS to fail, and the contagion along with the initial failure is still seen and fought out today.

The deal with math, and economics, and just about anything that can be defined with basic physics, works world wide.

[Trinnity]

Great, just great. Shit.

[michaelr]

Just don't ask him to define Fascism.

Just Wiki it and save yourself the trouble.

You took a beating on this already, you failed to admit that it is the marriage between corporate and state. Then you said you didn't want to go there. I know why, your puppet in chief is fascist and you don't want to admit it.

[Peter1469]

I have heard a $750T derivitative problem, but what is another $50T when talking about this much money. The MSM does seem to ignore the problem.

Obviously, governments cannot cover these private (soon to be) losses. Let's not try. And see what happens.....