FIN 401-Credit Default Swaps

FIN 401-Credit Default Swaps - Commodity Futures...

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Credit Default Swaps Group 4 Michael Mesrobian, Sean Finneran, and Nick Connolly
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History of CDS Created in the mid 1990’s Started off as roughly a $100 billion market By 2000, CDS grew to about $900 billion By 2008, it was estimated that $50 trillion worth of CDS were being exchanged $50,000,000,000,000
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Bucket Shops Created in the 1870’s Gambling rings to be on stocks or commodities Banned by the government in 1907 Compared to a CDS
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Why Such a Rapid Growth? No regulatory control
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Unformatted text preview: Commodity Futures Modernization Act of 2000 You dont have to go through a clearing-house or central exchange CDS allowed anyone to bet on the outcome of a stock, bond, commodities, ect. without actually owning the asset Legalized Gambling More Expansion Started out with only a few groups involved in CDS Soon secondary parties became involved Confusion started because now those involved didnt know who owned what...
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This note was uploaded on 11/15/2011 for the course FIN 401 taught by Professor Staff during the Spring '08 term at Miami University.

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FIN 401-Credit Default Swaps - Commodity Futures...

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