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hi_vis360
November, 2024

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Need homework help from anyone who knows anything about business

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skichicky3
Posts: 2593 - Karma: 64
Would a Credit Default Swap be considered a form of a Ponzi scheme?
Sep 30 2010 7:50PM
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1337
Posts: 31059 - Karma: 29,314
not 100%, but I've heard of them being called ponzi schemes before so i'd say yes.
Sep 30 2010 8:00PM
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Bukkakeskitrip
Posts: 5677 - Karma: 95
. credit default swap being inside the bubble of a ponzi scheme rings a bell. could be totally wrong though
Sep 30 2010 8:02PM
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Anathema
Posts: 21048 - Karma: 5,061

did i hear FONZI?!?!?!

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Sep 30 2010 8:02PM
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1337
Posts: 31059 - Karma: 29,314
however this is not always the case, but could be a form of it in a way
Sep 30 2010 8:02PM
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MEGAZORD
Posts: 4531 - Karma: -7
http://tinyurl.com/36zdevc
Sep 30 2010 8:13PM
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molsongolden
Posts: 1649 - Karma: 162
no they aren't ponzi schemes. ponzi schemes depend on cash flow and use money from new investors to pay fake gains to older investors.

a credit default swap is basically insurance on a bond. a bondholder can buy a credit default swap on a bond, if the issuing company defaults on the bond then the seller of the credit default swap pays the bondholder the face value of the bond.
Sep 30 2010 8:35PM
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skichicky3
Posts: 2593 - Karma: 64
thank you Mark!
Sep 30 2010 9:19PM
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