Credit Default Swaps: Next Phase of an Unravelling Crisis
By F. William Engdahl Global Research, June 5, 2008
The Sub Prime Meltdown is but the Tip of the Iceberg
While attention has been focused on the relatively tiny US “sub-prime” home mortgage default crisis as the center of the current financial and credit crisis impacting the Anglo-Saxon banking world, a far larger problem is now coming into focus. Sub-prime or high-risk Collateralized Mortgage Obligations, CMOs as they are called, are only the tip of a colossal iceberg of dodgy credits which are beginning to go sour. The next crisis is already beginning in the $62 TRILLION market for Credit Default Swaps. You never heard of them? It”s time to take a look, then.
The next phase of the unraveling crisis in the US-centered “revolution in finance” is emerging in the market for arcane instruments known as Credit Default Swaps or CDS. Wall Street bankers always have to have a short name for these things. [read more]