More on the subprime mess and credit default swaps
I’ve written a bit previously about the subprime mess, and about credit default swaps. This past Sunday, Oct 26, 2008, Steve Kroft did a piece on the CBS news program, 60 minutes about credit default swaps:
(Google video search for ’60 minutes kroft “credit default swaps”‘ in case the above video disappears.)
The gist of it is that credit default swaps were made legal in 2000,by the Commodity Futures Modernization Act of 2000 passed unanimously by Congress on the last day in the last vote of the lame duck Congress, which prohibited states from prosecuting Wall Street investors under gaming (anti gambling) laws passed in the wake of the crash of 1907. Those lows were a reaction to the “bucket shops” which were engaged in running gambling houses engaged in side-bets on what was going on in the stock market, which amplified the consequences of that crash.