They run a group of 'Hedge Funds' that bet on the collapse of
America. They would buy a $ trillion dollars in mortgages for 2% down,
or buy stock futures for pennies on the dollar, and the bet was
everything would collapse. Sort of like you borrowing $10,000 from your
bank, with $200 down, and then betting on a fixed horse race.
These same people were on the opposite side of the trade, and if they
lost, they stiffed the banks, and that is what is behind the derivative
debacle.
A derivative is simply placing an enormous bet with borrowed money.
Abe Felder borrows $100 million, and then bets that corn prices will collapse, he loses,
and Citicorp is stuck paying the Grossman Farm Collective the $100
million. When Citicorp goes bankrupt, then the American taxpayer gets
the bill.
