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The CDS made me do it

May 1, 2009

The Chrysler debacle has given rise to another CDS-related claim: these dastardly products permit scenarios in which bondholders are willing to put a company into bankruptcy by distorting the investors' incentives.  If the bondholders own a lot of CDS, then bankruptcy is more profitable than ongoing operations or restructuring. There are two major problems with […]

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