Economy-crippling derivatives becoming popular with banks again

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Economy-crippling derivatives becoming popular with banks again
Insurance giant American International Group, for instance, teetered on the brink of bankruptcy in 2008 because of its exposure to complex derivatives known as credit-default swaps. AIG's near collapse and the fall of Lehman Brothers led to provisions …
Read more on The Japan Times

Lenders take it on the chin in Orr's plan
… debt as “unsecured,” effectively declaring it no longer backed by the “full faith and credit” of the cash-strapped city, is roiling bondholders and threatening to alter the municipal bond market's assumption that cities will raise taxes to meet …
Read more on The Detroit News

Congressmen Warn Credit Raters Against Repeating History on CDOs
Synthetic CDOs, derivatives that pool credit-default swaps to make magnified bets on corporate debt, enabled securitization to expand even as the home-loan market dried up six years ago before the market seizure, the Financial Crisis Inquiry Committee …
Read more on Bloomberg

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