Credit default swaps | Finance & Capital Markets | Khan Academy

[@JA51592]

love how you dont waste time with unnecessary prologue and get right to the point!!

[@captainobvious1415]

"Hey wait, wait, wait, AIG. You only have 100 billion dollars in assets, but you have insured 1 trillion dollars of other people's debts!" Lmao I laughed so hard at this.

[@utubewatcher806]

Wasn't as funny in 2008...

[@tannershep3311]

In the financial sector as a buyer do your research don’t go with the flow and do your own numbers and make your decision because somehow the lawyers found a way to diversify liability and at the end no one is at fault it is part of the game unfortunately

[@DIYDanCars]

@@utubewatcher806 By his example AIG is leveraged at 10:1, but back in 2008 some banks were leveraged 30:1. Talk about insanity!!!

[@fromwaydeep]

There's something shady going on...

[@kwrer6087]

fyi only...How MultiBank Group evolved into one of the largest online financial derivatives l.linklyhq.com/l/2JS #banking #finance #derivatives

[@abhishekrattan3508]

came right here after watching big short

[@captainobvious1415]

+Abhishek Rattan all over your keyboard??

[@abhishekrattan3508]

+General Sarasota hahaha...... nah not literally :)

[@dannysipos]

same bro

[@davecrupel2817]

Thats a nice shirt. Do they make it for men?

[@someguy6528]

Loool same

[@Steve_Takes]

Not for nothing this is great. I needed this as I'm reading "The Big Short"

[@kosaksipasapukazh]

+Durandisse84 Durandisse I too came from The Big Shor

[@adolfhilter]

+Durandisse84 Durandisse Me 3

[@arianopel]

+Durandisse84 Durandisse same here

[@MaanavKhaitanChannel]

Same here!

[@PINAKIDEY]

Same here lol

[@SkISl0pE]

Saw the Big Short, now I'm reading the book, and I needed this video to understand it! Thanks Sal!

[@MrLavinfx]

actually i was scare to learn about CDS but the way you explained it was so easy to understand, thanks a million.KEEP THEM COMING we are paying close attention

[@beatilcoheadsmith]

I'm doing research for an author and have needed to learn the entire sphere of the financial lexicon from scratch. This video is the best explanation on CDS's BY FAR that I have seen

[@SamvitAgarwal]

This video was published at the perfect time

[@mastermindlord7901]

2020here and still watching this right after watching big short. Gives me straight information regarding the principle of financial fiasco in 2008.

[@animeeditor2714]

watching this in 2022 and was watching the big short but I left it in the middle as I was confused so I ended up here xd I realised this vid was 11 years old that's why its in 240p lol

[@RioChandraa-xr2cp]

Clearly understandable, very clear & precise! Love it! Just realized it was posted 15 yrs ago... truly an heritage!

[@excelisfun]

Sal, You are so amazing! Thanks for making it easy to understand! --ExcelIsFun

[@onion7568]

remember 13 years ago when people would sign off their youtube comments?

[@excelisfun]

@@onion7568 : ) : ) : ) : ) : )

[@opufy]

how ironic this was uploaded right in the midst of the housing market crash that's why im here

[@canopeaz]

It's nice that this video was published right when the Financial Crisis happened 11 years ago.

[@john.james-rambo]

Wish these old videos can be enhanced of Quality. 14 years later still helping everyone. Thank you guys.

[@jonschweer7494]

I have been in the fin markets since '73. I traded since 1987 in total OBIs so I got my scars. I have tried to explain it in layman's terms to my friends, found I had to back track often (and lost them in the story) but so far your C-D-1 made it clear to them. I will hit them tonite with C-D-2. Thanks for taking the work out of my hands.

[@MsMichaela999]

Absolutely love the khanacademy. Just when I though derivatives exam seemed pretty impossible, it all of a sudden all makes sense. God bless this lectures ;) Can you come and teach at our University?

[@Chubbychilli]

Sal....u are BRILLIANT! This was so clear. I totally understand CDS now. I have searched on the net for examples of what the heck they are...and you explained it so clearly here. Right...now onto the next video (I've watched about 5 today - they are addictive!)

[@jordanorta7476]

This dude saved me in college for chemistry, Microbio etc. Is there no limits to his brain!?

[@Steve_Takes]

Well who the hell is rating Moody's ability to Rate!!!

[@starsareangels]

+Durandisse84 Durandisse No one. Same with Standard and Poor's and Fitch.

[@FlexSZN23]

Shareholders

[@seandafny]

Moody’s

[@the_real_economics]

You are as an investor, as a free-market participant. You are supposed to be a sane person - you either take into consideration Moody rating or disregard it. You are a private person making a decision with you money. When you make money it is your private profit, when you lose money it is your private loss. What is important that if something goes under, government and the FED are not supposed to step in and save your private losses with the taxes or inflation money.

[@shashankbharadwaj9678]

The US SEC in the US, FCA in UK, SEBI in India; basically your national securities regulator.

[@epsonc882009]

Just watched "The big short", this is answered my question. Thank you!

[@songmin4453]

This presentation was the most wonderful I have seen! so simple to understand. Thanks a lot!!!

[@watchergd8369]

I was surprised this video was made 13 years ago. My curiosity started to be solved thanks to that video

[@jscanlan22]

Great job! Since, now even Greenspan admits that, markets are not self regulating. Who should we look to to set rules and regulations to govern these financial insturments?

[@snay6869]

Aged like fine wine

[@08Marina08]

Thank you so much!!!! Tomorrow I am writing a test and I didn´t get the whole thing about Credit Default Swaps... but now, it´s clear!!! Thanks!!!

[@CameronCope]

thanks for this tutorial ! I have started to do research into how the banking/financial system operates & as soon as I came across the point if CDS's I felt like I was missing something - because it made very little common sense ! What I am seeing though, is that these systems are not based on common sense and what is best for all but rather what makes money for specific parties for limited amounts of time - no self-responsibility, no concern for the impact on others ! WTF?!

[@hammerhead19able]

Thank you. Explained in a way I can understand how all this works.

[@ashimdahalii1874]

cant believe its 15 years old

[@bhaskarvishwajeet226]

Watching this exactly 16 years later - September 29, 2024.

[@lawforever]

This guy is great in teaching us these diffucult subject. Awesome!

[@jonathanwood8847]

9:54 "you get insurance, you get insurance, everyone gets insurance!!!!!!"

[@orginunknown]

EXCELLENT JOB! this is how this stuff should be explained. dumbed without financial jargon thats meaningless to the layman. bravo.

[@charizarduz]

Im just watching the big short right now, paused it to come here, thanks for making me feel like im not trying to read hieroglyphics!

[@PunmasterSTP]

Credit default swaps? More like "C'mon, this video rocks!" Thanks for another banger.

[@deshn21]

You are one of the best teachers in the world

[@justincdotme]

thanks, now I can get back to watching The Big Short and actually understand it.

[@Steve_Takes]

Holy shit, from 6:45 to 7:10 Nails it all together guys.... but you gotta be patient and watch from the begining

[@JulioSoto1685]

Great explanation. Thanks for freaking me out.

[@colonelburger]

Amazing clarification. Thank you very much for creating this. I am so angry at those Insurance Companies!

[@ispinola]

Credit Suisse CDS situation has me watching this.

[@FluffHead]

Awesome....Ive been trying to understand this and couldnt find any videos that made sense to me, but this video made sense. thanks

[@khanacademy]

I'll have to ask my wife :) I think she'd prefer that I stick to recording videos.

[@greatjoeblack2202]

Your explanations are very interesting, pls keep on

[@JoseTorres-ry9qe]

Me watching this video after the US Bonds Treasury deranks from AAA to AA+

[@NavdeepSingh-bv3lv]

Lol this is a productive day for me. First the awesome Matt Damon narrated documentary, Inside Job, the the big short and then these vids. I love knowledge. ;)

[@kennethmulongo6341]

I thought this video was great. Had no idea how CDS works but now I do. On top of that I also understand the massive risk with this! Thanks so much

[@bharati1986]

Brilliant stuff. had been trying to find reading material on this but kept getting consfused. this is so good! thanks!

[@jerwinbalicano5046]

I like how you convey the context without exploiting their nastiness

[@choozu]

Today I “got” The Big Short! 😍 Love you man... Subscribed

[@gc7304]

you make me understand the world man. thank you

[@adamafernandes9567]

"Pension fund.. Pension Fund.." love it!

[@pyaethein1699]

Nice explanation! It was easy to understand.

[@georgeofhamilton]

I didn't know that Khan Academy was this old.

[@hassansaad6536]

Khan academy is even older than that !

[@mavrick0ck]

thanks so much. this is such a clear tutorial on what a CDS is..

[@smclo03]

Excellent! I never truly understood CDS's before this video.

[@rodrigog.c.9407]

These videos are amazing. There's room for improvement in the aesthetics but other than that they're very eye opening. Thank you for sharing this knowledge for free.

[@InIt2winIt247]

Backhanded compliment!

[@vivs005]

Thank you so much for that. I'm a dummy so I didn't get anything from wikipedia or investopedia. But your video cleared it in once. Thanks a lot!

[@malthus101]

Excellent video, very clear now on what they are - I will watch your other videos! Thanks.

[@kennethsparks4824]

outstanding!!! Thanks Sal!!!

[@ysfkfnd]

There are multiple issues with credit rating companies. 1. They rate the company situation at the present for a debt to be paid 10+ years from now; no commitments on any sides. 2. They are paid by the company being rated. 3. They have no liabilities if rating degrades over time. 4. A company's rating can be dramatically downgraded in 2 years from AAA to BB, for example.

[@Alex-zz6vt]

Watch this years ago. But, this video is gonna get popular again in 9 month to a year

[@rj8954]

Very useful tutorial. Clear and easy to understand. Keep it going.

[@duc9395]

Unreal videos. Good work!

[@idally89]

Good explanation. Yet, do you agree about what some market commentators argue that unless there is a strict control of these credit derivatives what happened few years ago in 2007 may happen again?

[@thegrandfoundationchurchof7138]

Free online education. Must watch videos... Very Cool.

[@DeeSee25]

Wow, this helps a lot. This makes a lot more sense now.

[@chalmerbasham695]

The Government qualified to “rate” risk of investments. LOL $34,000,000,000,000.00 federal debt and the only way to eliminate is default or print. Rate the results of doing either or some of both. 🆘

[@jaykay9433]

You are a good teacher my friend

[@misao3004]

I love and hate how complicated the financial world is

[@LeoLeo-sh4vm]

I'm always learning new terms in Wallstreetbets.

[@NOREALESTATEINVESTORLEFTBEHIND]

What a great video explaining what I already knew but couldn't diagram out, thank you very much Sal, would love to be able to share this video on our KZbin channel

[@kabmedina]

If that is the structure, if I am Corp A or B with a low rating, I would just default entirely because I know that someone’s backing me up in case I default lol. If that’s the case, does it shift the liability from Pension fund to AIG?

[@prakash2118]

Learning finance from you makes it very easy. Thank you sir🙏

[@tamadawoo5676]

watching [the big short] now. good lecture.

[@bobroberts5074]

Best explanation hands down. Thank you

[@greenmirror5555]

imf/nato wealth theft taxation currency is an amazing subject! Article 1 Section 10

[@prathmeeshpwaliwandekar6760]

Fabulously explained. Thanks

[@successmaharjan2906]

this is great. it totally help me to understand the credit default swaps.

[@GermBrit]

Great work on this video. You make everything so easy to understand.

[@christophgouws8311]

You explain it so well

[@dlhfm4281]

Simplest way to think it is buying a credit default swap is like insurance and you pay a monthly premium to the bank. In return the bank promises a payout if something happens, in this case thousands of mortgage backed securities failing and the banks payed out big time to the 3 big shorts.

[@kumaravelrajan]

Excellent. Just excellent.

[@kevinrandalrulach]

Great video. Well explained..

[@blin7509]

Low interest rate is the problem. Now all these pensions can’t pay their obligations with interest income so they have to go out their ways to fund the payouts. No wonder Robert Kiyosaki wrote the book

[@canopeaz]

If you are a corporation that wants to borrow money, you have to hope that Moody's is in a good mood.

[@observerbigbe7786]

Thanks dude much appreciated

[@Fj8282haha]

Thx khan, now I know who to donate of my billions in future :) work hard for ya good ppl. peace lol

[@JayRappa]

Another excellent, simplified explanation. I ask myself sometimes how moody's can hold such incredible power of companies and underlying securities.

[@arisraz]

very helpful video.. help me finishing my term report. thank you ^_^

[@BettyRox0890]

Thank you soooo much!!! I have a test tomorrow and this was the one thing I just could not get. I was so confused! (@,@)

[@mattfotsch5550]

You make it sound like the credit agencies couldn't do a good job. It is true they blew the MBS and CDO markets. However, they were quite accurate on ratings for everything else. Essentially, they had issues rating Mortgages and their derivatives mostly, due to the reasons you spoke about in your housing bubble section.

[@tr4nscend]

the fact that this was posted in 2008, epic

[@kirstyadamson1]

really clear and useful thank you

[@AnakinSkywalker-zq6lm]

If we don’t give them the ratings they’ll just good to Moodys down the street… Or something like that i don’t remember lol

[@ConnectDaPlug]

the fact that the insurance entities are not putting up any collateral from their own assets is crazy if they no longer honour the contractual obligations

[@Insigma83]

Beautiful explanation

[@wrongnumber6]

thanks for making this so simple !

[@Jdalio5]

After it collapses just remember to rince and repeat like the JIRMACK bottle says.

[@abhinavitsmebellamy]

Thanks for this. Great explanation!!

[@peacefullbrown]

@Khan Academy: this is exactly the graphic resumy I was looking for CDS understanding! ;)

[@twentysixstrings]

Thank you very much for this excellent explanation.