A financial trader known as the "London Whale" is making a splash on Wall Street, taking a huge bet worth possibly tens of billions of dollars on corporate credit default swaps.
Yesterday, Standard & Poor's downgraded Greece's credit rating to "selective default." It's a move that everyone expected, but what's the difference between that and the messy default it was trying to avoid?
When the analysts and experts talk about the current financial crisis, they often refer to "credit default swaps." So, what exactly is a credit default swap? Marketplace Senior Editor Paddy Hirsch goes to the whiteboard for this explanation.
