What is truth?

By Rudy_Avizius                   

A quick look at the curtain which they hide behind reveals one shadowy organization that represents the interests of these money masters, the International Swaps and Derivatives Association also known as ISDA. The officers and directors of this organization include some of the largest hedge funds and most of the major banks in the world including the largest banks in the United States. One of the purposes of the ISDA is determine if a “credit event” is actually a default. If a “credit event” is declared to be a default, then Credit Default Swap (CDS) contracts come into play.

Most people have heard of Credit Default Swaps and derivatives, but are not quite sure of what they really are. Before I can continue with this article, I will present a short description of these two financial instruments. Please bear with me on this as things will get interesting shortly.

Credit Default Swaps (CDS) can be generally considered to be insurance policies issued by banks (sellers) and taken out by investors (buyers) to protect against failure among their investments. The problem with them is that while insurance companies are regulated to make sure that the companies have the ability to pay their claims, the CDS issued by the bankers are largely unregulated.

Derivatives are financial instrument whose value is based on the value of another financial instrument. If one looked at a football team: it owns the stadium, has contracts with players, has advertising rights, has television contracts etc. Each one of these is an economic entity capable of generating income. Derivatives could be considered the bets that people place on these teams. (Credit Default Swaps are a form of derivatives).

full article at source: http://www.marketoracle.co.uk/Article33140.html

Comments on: "The Money Masters Are Living in Fear" (1)

  1. One would have thought banks were debarred from gambling? If permitted to “insure” then one would have thought they would be subject to insurance law? But it seems banks gambled to the value of nearly twice the entire world’s GDP ($100 quadrillion). So what? They’re all bankrupt now but think it better if the other 99.999% of the people in the world pay them anyway so that say 100,000 mega-rich people get paid out to the tune of €1 billion each. All that is required is that the other 99.999% of the world’s people are impoverished. Easy. So, what’s the problem?

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