AIG published credit default swaps with the over $five-hundred mil in the assets
It was the fresh $78 billion inside the credit standard exchanges towards the multi-market collateralized debt burden-a protection supported by personal debt money out of home-based and you will commercial mortgages, domestic guarantee money, and a lot more-that ended up very difficult. AIG’s troubles was exacerbated from the proven fact that these people were you to definitely-ways wagers. AIG did not have any offsetting positions who would return when the their swaps within field missing currency.
Bonds Lending Series The actual Story
McDonald and you can Paulson’s investigation revealed that there is even more to your situation than the credit default exchanges. Bonds lending shed the company a massive amount of cash due to the fact better.
Ties lending is a common financial transaction in which you to definitely place borrows a protection out of another type of and offer in initial deposit of security, usually bucks, toward lender.
State, as an example, that you work on a fund that have a big investment within the IBM. There may be causes some body must obtain your own IBM offers, referring to a basic way to create some extra money on new inventory you really have, McDonald says. (suite…)
