Credit-default swaps got a bad name during the 2008 financial debacle. Yet, they are still used, to the tune of about $28 trillion, despite the media rhetoric about how bad they are.
The major marketplace, is owned by a group of banks, Markit Group Holdings Ltd., and this also gets undo criticism.
The problem with credit-default swaps is that the market for the swaps index based on their data may not have been entirely accurate. Perceptions of value may have been off during the 2008 meltdown.
All market-determining values being watched may not be trustworthy. It appears. though, credit-default swaps may have been even more accurate than many other major financial statistics we rely on.
Such as the figures on which mark-to-market accounting helped bring about that 2008 financial meltdown.
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