The media are beginning to sort through the debris and identify the upwards of 60-trillion dollars in bogus Credit Default Swaps as the real malignancy in today's global economic meltdown.
It's even argued that world governments should step in to make good these enormous liabilities. Yeah, that's right, a taxpayer funded SIXTY TRILLION dollar bailout.
Here's my problem with that idea. The banks, stock brokers and insurers who were trading back and forth in these Credit Default Swaps had to know they weren't worth the paper they were printed on. They had to know that they weren't good for the obligations they were selling and that the other firms weren't good for the obligations either.
So, if they engaged in this mutual, mass larceny - why the hell are taxpayers supposed to make good what was never more than scrap paper anyway?
What would happen if the world governments simply declared all Credit Default Swaps null and void? Tell all these financial sector giants that they're no longer liable on the CDSs they wrote but they won't be collecting anything on the CDSs they're holding either. It started off as a greed-driven scam, it continued as a greed-driven scam all the way until the meltdown, so why legitimize a scam by forcing the taxpayer make it good?