The hey-day for exotic bets on credit risk spanned most of the first decade of the 21st century. The popping of the housing bubble in 2008 did it in. People lost homes that they bought with debt they couldn't repay; and plenty of investors watched in horror as the value of the junk they'd bought — collateralized debt
credit default
Snappy and Bitey Ponder the Beauty of Credit Default Swaps
By Barry Barnett on
Scene: An office near Ground Zero. Way up high. Perhaps in 40 Wall Street. Which has that awesome Duane Reade store on the ground floor. Some place posh in the area no matter what.
Snappy: Did you know, Bitey, that people could insure themselves against risks they Do Not Have?
Bitey: When, in the course…
RICO Can’t Reach Aiding and Abetting Securities Fraud, Second Circuit Rules
By Barry Barnett on
Way back in January 2009, Blawgletter wrote that we doubted a 1995 federal law – a sub-section of which the Second Circuit called "the RICO Amendment" — bars claims, under the Racketeer-Influenced and Corrupt Organizations Act, that allege fraud involving credit default swaps and other swap contracts. MLSMK Inv. Co. v. JP Morgan Chase & Co., No.