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...swaps (CDSs). Essentially, AIG is swapping cash flows with other institutions: those banks pay AIG a small sum on a regular basis, and then under certain conditions - like mass foreclosure or corporations' defaulting on their loans - AIG pays out a large sum. In other words, AIG sold insurance; its problem is that it is paying out too much...

Author: /time Magazine | Title: The Case for Letting AIG Fail | 3/16/2009 | See Source »

...most direct solution for the swap problem is to settle all such agreements and eliminate their uncertainty from the equation. If the payments are reversed, or the payments are stopped, or they are settled once and for all, the uncertainty will vanish...

Author: /time Magazine | Title: The Case for Letting AIG Fail | 3/16/2009 | See Source »

...problem with keeping the swaps on the banks' books is that their potential payoff or loss is random, depending on the particular details of the contract and various outcomes in the world. Moreover, banks today are risk-averse and often factor worst-case scenarios into current pricing. Thus, they are far more likely to claim losses than profits on such instruments...

Author: /time Magazine | Title: The Case for Letting AIG Fail | 3/16/2009 | See Source »

...major problem with HIV is that it mutates in the body very quickly, so the immune system doesn't always recognize the virus as something it's encountered before. This is a stumbling block for vaccinemakers, but it's also the reason so few people are able to control an HIV infection naturally, like the six people studied in Nussenzweig's lab. Now, understanding this process could be key to the next vaccines. "It's just that the antibodies are too late," Nussenzweig says, referring to the typical immune response. "The antibody is always chasing the virus around...

Author: /time Magazine | Title: A New Approach to Designing the AIDS Vaccine | 3/16/2009 | See Source »

...something wrong with trivializing important issues and causes like gay rights, the environment, or citizenship for the sake of having the political equivalent of the “It Bag,” it’s the air of self-proclaimed importance that’s really the problem. I take no issue with celebrities having political opinions, and (most of the time) I don’t mind when they vocalize those opinions. After all, that’s their constitutionally guaranteed right. But, when they use (or, rather, abuse) their celebrity status as a vessel for advancing...

Author: By James K. Mcauley | Title: A Confederacy of Dunces | 3/16/2009 | See Source »

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