Quote:
Originally Posted by EscortBiz
AIG goes under and you have total collapse of everything I mean forget it
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but there is not enought money to pay for all of those CDS blackholes. maybe goverment can pay for AIG (remeber they will come next quater for another 20-30 billions and then quater after quater again), but then there are other players (eg.JPM) with CDS who are on the way to become same blackhole like AIG.
THERE IS NOT ENOUGH MONEY TO PAY FOR ALL FUTURE LOSSES on CDS.
so you can either bankrupt AIG and then like 50% of banking system or bankrupt USA, if goverment wants taxpayer to continue with covering CDS contracts.
or you can simply cancel all CDS contracts, because most of them were based on fraud (there were never money to cover the losses) anyway and save a big part of system.