What Caused the Economic Crisis? (CDS)

What Caused the Economic Crisis?

Alex Floum, Examiner, April 24

Warren Buffett called them “weapons of mass destruction” in 2003.

President Bush said they had to be regulated.
So did the chairman of the Securities and Exchange Commission, and the current head of the Federal reserve.
As did the G-20 group of the world’s 20 richest nations.
Former Federal Reserve Chairman Alan Greenspan - after being one of their biggest cheerleaders - now says they are dangerous.
And a Nobel prize-winning economist said they should be “blown up or burned”, and we should start fresh.

What Are They Talking About? What are the above-listed folks talking about?

A financial instrument called “credit default swaps” (CDS for short). (more)