need to add title here

Financial WMDs

August 27, 2009 11:20 AM

Steve Kroft examines the complicated financial instruments known as credit default swaps and the central role they are playing in the unfolding economic crisis.

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by samuel1001 September 1, 2009 5:11 PM EDT
Can not get video feed to watch the broadcast
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by KenKnull August 30, 2009 8:28 PM EDT
Mr. Pelli's report confirmed my understanding of the underlying cause of the economic meltdown of the last two years. What wasn't reported was what has been done to repeal the obviously catastophic legislation of 2000 that allowed it to occur. Specifically, what has Congress done to repeal the Commodity Futures Modernization Act of 2000? Can states now prosecute Wall Street "gambling"? Ken Knull, Lancaster , Virginia
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by DPRESTONJR August 30, 2009 7:51 PM EDT
Steve-
While you tell a telling story I believe its very one sided! These synthetic investments - like most commodity forward contracts- offer 2 types of investors speculators and hedgers. These investments offered large accounts the ability to effectively hedge (reduce the risk) of an otherwise risky investment. The speculators which you targeted ARE as you say gamblers. These investments do have a place in finanancial planning if properly regulated. I think the other side of this piece should also be discussed.
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by hock1 August 30, 2009 7:50 PM EDT
RE: Your "expose" of the Credit Default situation: you ALMOST got it. The way you reported this situation was enlightening but you missed the most important aspect: The entities that bought the insurance (i.e. cd's), with the ability to short shares of public entities on down-ticks and no requirement to deliver those shorted shares, actually caused the failure of the companies for which they bought the insurance. Simply, it is like having the ability to buy insurance on your neighbor's house and then getting PAID to burn it down (twice). I know it is difficult to understand, but please try. No individual will invest again until you get it right.
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by thenemo1-2009 August 29, 2009 4:00 AM EDT
All this bad debt being held by the big banks using TARP money isn't being written down Allen greenspan admitted it and said until R.E. is brought into line with an amount that makes the banks whole we aren't going to get out of this mess.
Now he didn't admit that clearly after all people would want to know why something wasn't said to warn the people and the Govt.
Gotha!
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by thenemo1-2009 August 29, 2009 3:55 AM EDT
Aig and everyone they did business with all were in it together.
Wall St was part in part along with all the people that sold bad paper backed up by worthless guarantees.
Everyone was making a profit and the people were getting screwed and we are being screwed to save the Companies that screwed us.
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