• 18 Mar 2009 at 11:44 AM

Gary Ackerman On Credit Default Swaps

By Bess Levin

Picture 919.png“There are two guys out on a life raft and they drift out to sea. They’re surrounded by sharks, there’s a huge tidal wave, and one guy says he’s scared, and the other guy sells him a policy. That’s a credit default swap. Stop laughing, it’s not funny. We’re crying.”

Comments (10)

  1. 1
    Posted by Anal_yst | March 18, 2009 at 11:59 AM

    Jesus christ this guy should be publicly hanged, or at least forcibly removed from office, like yesterday

  2. 2
    Posted by guest | March 18, 2009 at 12:01 PM

    @1- really? he’s nowhere near as bad as his compatriots.

  3. 3
    Posted by PatrickBateman | March 18, 2009 at 12:14 PM

    People who use such metaphors to simplify a complicated market are dingbats. He assumes there IS a storm to begin with…..

  4. 4
    Posted by guest | March 18, 2009 at 12:25 PM

    That guy’s OVER simplifying. Just because that was AIG’s strategy doesn’t mean the entire CDS market is like this.

  5. 5
    Posted by guest | March 18, 2009 at 12:26 PM

    @4- well, the hearing was focusing on AIG, so…

  6. 6
    Posted by guest | March 18, 2009 at 12:29 PM

    wait. i don’t get it. how does the policy seller get his back office to confirm the trade?

  7. 7
    Posted by guest | March 18, 2009 at 1:20 PM

    He forgot about the second guy hedging back to the first guy

  8. 8
    Posted by guest | March 18, 2009 at 1:47 PM

    Israel is against CDS’s now? Who knew!

  9. 9
    Posted by guest | March 18, 2009 at 2:11 PM

    @6 his PB Bear Stearns takes care of it. duh

  10. 10
    Posted by guest | March 18, 2009 at 2:43 PM

    Actually the policy is hedged with the sharks

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