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Joe Rotger
Civil engineer, trading oil mainly, father of 4.
Interests: Will play a good soccer game any day...
Recent Activity
I'm surprised. A CDS is structurally toxic because it's not regulated by the insurance authorities. It's a wicked "financial" instrument conceived to deceive, where premiums are exacted with the false pretense of providing insurance. Claims may never be paid because there are no sound actuarial provisions set aside to cover these claims. ...and, I'm surprised that they still haven't been banned by law. In the hands of financiers, it's nitroglycerin. I could take a CDS on the mortgage of your house, as well as any number of us could, and carelessly drop a match while I pass by your house (Lehman shorts), to see it burn to cinders, and to collect the claim on the debt after having paid a few premiums. Run the numbers, but believe me, I have never seen a better investment in my life. (Sorry for you house). My next surprise. At the end of the day we "the people" will be left to clean up the mess. It's always been that way and it always will. Someone, somewhere, will come up with a CDS idea... So, how do we protect ourselves? I suggest we promote legislation to regulate that all debts be insured. Surely, insurance companies would vie for this lucrative market setting competitive premiums. Then, hopefully, Lloyd's men would pay at the day of the next reckoning at least a good chunk of the pie. Honest CDS can be a great tool.
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