Does Geithner's Plan Address Credit Default Swaps???

[Junkdrawer]

So...When this public/private partnership buys a mortgage security from a bank, is the "default insurance" canceled

- or -

will the "default insurance" be considered a vital part of the "bargain" and thus force the Federal government to continue to prop up AIG forever?

I'm guessing the later....you know Geithner and the sanctity of contracts.

[sam sarrha]

1. obviously it's more like the sanctity of the rich getting richer, wealth is proof of gods favor of a

man, therefore it is a mortal sin to tax a rich man, or interfere with gods method of transmission of wealth to him

no shit they believe that crap

[RB TexLa]

2. I don't know if whoever owns the cds would have to sell it to the government

I would think if it's on toxic assets they would keep it. The private/government entity might not buy them, I'm sure the cost would be very high. Unless they are requiring companies to sell ones they have with the toxic assets to them I don't see those moving. They may have sold them off already to raise cash.

[Junkdrawer]

3. I've heard conflicting stories. Some say it was the CDSs that allowed...

the rating agencies to bestow the AAA rating on CDOs and some say the AAA rating came from the traunching of the mortgage pools...

If it was the former, the CDS seems an indispensable part of the CDO.

[RB TexLa]

4. I think if the government wants it and the security holder owns it, the government is going to get

it.

They can't just go away, until they expire.