Another Financial Crisis Could Be Coming

Michael Greenberger says unregulated credit default swaps could take down the economy—and taxpayers—again.

In 2008 unregulated credit default swaps brought the economy to its knees. Ten years later, they may poised to do so again—unless policymakers reign in the big banks.

That’s the call to arms of University of Maryland Law Professor Michael Greenberger, whose new INET Working Paper details how the largest American banks have quietly parked swaps oversees, thus evading the regulations designed to prevent another crisis.

Professor Greenberger and INET President Rob Johmson talk about the paper, including how swaps work, the so-called “moral hazard” of banks knowing they can be bailed out by taxpayers, and how politicians in Washington and state capitals can ensure that risky swaps never again take down the economy. As Greenberger argues, despite the rosy picture of the economy painted by politicians and the media, the lurking danger of unregulated swaps is very much real.

[someoneelse.]

I feel so patriotic and privileged to know that I will help the Banks and Wall St out, when they come crying for bail out money.
Don't you....?

[henrythegreatamerican]

Thank you for helping me understand the destructive nature of default swaps. You gave me another weapon to use against the financially illiterate who support the current economic system. The people who hear the word "growth" in reference to the economy and immediately conjure images of a prosperous well managed nation. The people who think billionaires with "business experience" are outsiders and worthy of their vote.

[rogerdodger]

I'm stocking up on beer and hot dogs. If the end comes, the whole neighborhood is coming to my house.

[kirstinstrand]

This interview is AMAZING.
Also, it gives the best explanation of Credit Default Swaps I've heard.
If everyone here just asked some person they know who only listens to MSM to listen to just one Independent media interview this one is the one.

[debtn]

" the banks own this place".

[divizionx]

the only time the american dream seems real is when im sleeping.

[pauldusa]

The Whole System, is Disgusting, , it turns my stomach, even thinking about it, But a good Video

[myemailingid]

The first and only channel focusing future issues....!! much needed.

[WilliamFang]

In sum, an insurance policy requires the purchaser to own the risk, while a CDS does not.

[aitheignis]

Listen to this in 2022. With the raising rate, we might actually see this play out for real.

[kenrose]

And this time let's do a referendum on it like Iceland did

[TheGuy]

I THOUGHT THAT WAS RAY DALIO IN THE THUMBNAIL LOL

[klam]

speaking of buybacks: how come co's have excess money? ON the one hand there's no competition, on the other there's no growth and no investment required. "FREE MARKETS" would dictate that if there's no growth, the revenues should come down! the game is RIGGED. Free money for the rich. FUrther: buybacks are needed in MORE VOLUME to give the same "kick" given lowered tax rates; combine this with higher interest rates. But Andrew Fastow saw no jail time, so

[tatialo]

I live in Puerto Rico because of the mess in America! I live a minimalist life now! I spend only the money i have, no credit for me!!! Bought a house for 20, 000 to fix up.

[johnf]

I think the courts should be kept out of restructuring if at all possible. The courts in some cases destroy wealth and confidence.

[totonow]

I always like the "way you sat" it.

[gjwaters]

interesting study of modern economics. money is a quantitative measurement of qualitative values. there is a white noise or diffusion of energy not accurately quantified.

[esssquire]

The US has approved "bail-in" legislation: this allows first recourse to a failing banks own depositors and shareholders before taxpayers are required to pay. Other G-20 countries, including Canada, have also approved "bail-in" legislations, pursuant to the G-20 Brisbane meeting. This means that there would not be a need for a bail-out, at first.

[threedogsandacamper]

I wonder if naked credit default swaps have been taken out against corporate debt in places like Turkey and Argentina....

[emmanuelameyaw]

Of course, someone always take excessive risk or hide the real market value of their firm...