Word: swapsã
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...pointed to the proliferation of financial engineering techniques—such as credit derivatives and credit default swaps??as methods of “taking bad paper and making it look like good paper...
Imagine taking out a life-insurance policy, not on yourself, but on a sick man who lives down the street. That way, if he dies, you’ll be sure to turn a profit. This is but one of many bizarre features in the world of credit default swaps??a financial instrument that crippled our global economy. While many different events and policies contributed to the financial crisis, it is safe to point a finger at credit default swaps. The U.S. government should decisively regulate these complex financial instruments...
...Enron fiasco, it is that all should be wary of a corporation announcing a trade that, upon closer examination, isn’t really a trade at all. By using an accounting gimmick to disguise its enormous debts as derivatives trades—known “prepaid swaps??—Enron’s management conned its shareholders and employees out of millions of dollars. Now it looks like the Harvard Corporation is trying to pull the same “false swap” scam...
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