Credit Default Swaps
The Bush Administration started explaining the current Financial Crisis as one that was caused by the Home Boom going Bust. As usual with the Bush Administration, that could not be further from the truth even if the truth dwelt seven galaxies away from earth. The Bush Administration tried to claim that because 5% of the home mortgages in America were in default the Banking System was collapsing, does anyone believe that if 5% of Mortgages are not being paid while 95% are being paid on time that the 5% would outweigh the 95%? The real problem and the cause of the economic collapse is Credit Default Swaps. The Financial Wizards of Wall Street starting using Credit Default Swaps as a trading hedge which they were never meant to be, and because legislation by Senator Phil "Americans are Whiners" Gramm, and signed by Bill Clinton as part of a larger spending appropriations bill, Credit Default swaps were kept unregulated. The unregulated Credit Default Swaps meant that they were a...