Even the ‘smartest guys in the room’ are easily fooled…

I enojoyed reading this blog posting – all of the complicated, involved CDS transactions and setups were intended to reduce, or even remove, risk from loss on the underlying asset. Well, the smart guys who thought them up got caught using them on a bet against subprime performing and were schooled by others. Unfortunately, it leaves them with a little less TARP money…


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