March 19, 2009 4:49:07 AM
Many of you by now have no doubt heard something about relatively obscure investment vehicles called Credit Default Swaps and their role in the demise of the insurance jaugernaut AIG. In the past, I suspect that few had ever heard of these or, if they had, were not very familiar with them. Admitedly neither was I. To my surprise, I found that this obscure market had grown exponentially over the the past 10-plus years to roughly twice the size of the U.S. stock market. That certainly encourages some questions: What exactly is a Credit Default Swap and how did they become the center of attention in these turbulent financial times?
October 09, 2008 5:38:01 AM
Through September 30, 2008, most broad market equity indices are down double digits with international stocks leading the way for 2008. Parts of the bond market (which are looked upon as defensive investments) have dipped into negative territory due to a frantic flight to safety by investors.