Credit default swaps and derivatives explained (60 Minutes, CSPAN videos)

I came across some videos from 60 Minutes discussing credit default swaps and derivatives and thought I'd present them on this blog. These contracts have had a huge role in today's financial crisis and were directly responsible for AIG's fall.

The first video was aired on 10/26/2008 where Steve Kroft of 60 Minutes had interviews including Eric Dinallo, the insurance superintendent for the state of New York, who I remember spoke at a CSPAN hearing on 10/14/2008 that addressed the role of derivatives in the current financial crisis. I was able to embed that video below which was very informative since he was at a Senate committee hearing under oath. The second video is interesting, it's a video from 7/23/1995 where Steve Kroft investigated stock derivatives and the dangers they posed to investors. He was right about them "bringing down the world banking system"! So hope you enjoy some weekend Distressed Volatility financial entertainment. More to come tomorrow.


Credit Default Swaps (60 Minutes 10/26/2008)

Derivatives (60 Minutes 7/23/1995)

Role of Derivatives in the Financial Crisis (CSPAN Hearing (fast forward to 35:00 for Dinallo's Speech)

Here is the whole 60 Minutes article: The Bet That Blew Up Wall Street.