Gee, Ya Think?
Jan 30th, 2008 at 9:56 am by Susie
Talk about locking the barn door after the Big Shitpile is out:
Troubles at U.S. bond insurers are forcing industry regulators to rethink a decade-old legal loophole that allowed insurers to venture into the obscure world of derivatives.
The housing downturn is threatening to cripple some bond insurers that wrote billions of dollars of guarantees in the past few years on securities backed by risky subprime-mortgage debt. They entered into contracts known as credit-default swaps, which are derivative instruments that require firms to pay out money when a bond defaults. The ability of bond insurers to make good on their guarantees is in question.
The thing that absolutely astounds me is that we already went through all this crap with derivatives back in the ’80s. Anyone else remember California’s Orange County going bankrupt as a result of their investments? Yoo hoo!
Ah, yes… Orange County. It didn’t come to mind but I do remember it now that you’ve mentioned it.
My boys had a hand in every cookie jar. They learned from the best.