So in chapter 3 the book talks about AIG FP being on the sell side and, eventually, the losing side of credit default swaps for the subprime housing market. The book explanation was that only Triple A rated insurance companies could use their balance to make risky bets like these. My question is why would they make losing bets like these in the first place? And why did they need to bury these assets on the balance sheet?
It would also be great if someone could explain interest rate swaps and their purpose. Thanks!
Submitted May 06, 2019 at 08:33PM by threehitswonder http://bit.ly/2H48XFk
