The second shoe to drop. I am working desperately to understand this issue, but my gut tells me this is going to cost more than $1 trillion to fix the problem.
I know the seizing of the credit market has strong roots in the housing bubble, but I think something fishy is going on with these credit default swaps. These unregulated insurance policies were securitized and traded without a normal trading platform. There isn't a commodities board like the Chicago Board of Trade, for example. Two values exist for these which are also confusing. Some suggest the value as $63 trillion in assets. Others indicate only their total value as $2.5 trillion. Regardless, the trading of these stopped, and this had something to do with the market seizure.
Criminal investigations are being conducted by the Securities Exchange Commission and the New York Attorney General Andrew Cuomo.
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