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credit default swap
(FINANCE) financial instrument in which buyer is someone who needs insurance against the possibility that a borrower will default on a loan. In that case, the counterparty is whoever receives the CDS premiums, and pays out in the event of default.
WHY IT'S BAD
Loans are usually made by either commercial banks (in which a loan officer is supposed to make a professional assessment of risk of default before handing over the money), or by investment banks (which underwrite securities like bonds). If the borrower has a high risk of default, then the loan should not be made--period.
Credit default swaps were a stupid method of supposedly turning a bad loan into a "risky" (and potentially high-yield) "investment"; they were in reality a strategy for fraud. Since portfolio managers knew they were bundling securitized loans that contained mostly crap, they would arrange credit default swaps and cash in when the borrowers defaulted.
WHY IT'S BAD
Loans are usually made by either commercial banks (in which a loan officer is supposed to make a professional assessment of risk of default before handing over the money), or by investment banks (which underwrite securities like bonds). If the borrower has a high risk of default, then the loan should not be made--period.
Credit default swaps were a stupid method of supposedly turning a bad loan into a "risky" (and potentially high-yield) "investment"; they were in reality a strategy for fraud. Since portfolio managers knew they were bundling securitized loans that contained mostly crap, they would arrange credit default swaps and cash in when the borrowers defaulted.
What the bankers hit on was a sort of insurance policy: a third party would assume the risk of the debt going sour, and in exchange would receive regular payments from the bank, similar to insurance premiums. JPMorgan would then get to remove the risk from its books and free up the reserves. The scheme was called a "credit default swap," and it was a twist on something bankers had been doing for a while to hedge against fluctuations in interest rates and commodity prices.
{Newsweek, "The Monster That Ate Wall Street," 27 Sep 2008}
{Newsweek, "The Monster That Ate Wall Street," 27 Sep 2008}
credit default swap by Abu Yahya July 17, 2010
Lynch swap
a strategy in algebra in which if x/y=z, then y and z can be quickly "swapped" so that x/z=y. Very helpful for quickly solving for a variable.
Named after Mr. Lynch, a Floridian calculus teacher.
Named after Mr. Lynch, a Floridian calculus teacher.
Student θ: Ugh... solving 3/x=4 for x is going to take me like a bajillion steps.
Mr. Lynch: lol just Lynch swap 4 and the denominator x.
Mr. Lynch: lol just Lynch swap 4 and the denominator x.
Lynch swap by peculiargoldfish October 3, 2019
Gravy Swap
Gravy Swap by GravyBoiii December 20, 2021
Shwapper
Never gives up, hard worker, passionate at everything they do in life, has a smile they inspires people to do better, stay motivate, doesn't waste time, puts the standards for the working man, aims to be the top, always thankful, and always stays humble!
Shwapper by PierceSupport September 8, 2017
Swapmeet Girl
Swapmeet Girl by Kid_Salami February 24, 2021
More from Urban Dictionary
EBK
EBK stands for "Elite Ball Knowledge." 1 In internet slang, "ball knowledge" originally referred to a deep understanding of football/soccer or basketball, but it has evolved into a broader term for having a highly sophisticated, deep, or niche understanding of any specific topic (such as music, movies, or subcultures).
Yap Trap
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Blexas
Texas is categorized as a swing state in presidential elections, but has voted for Republicans more times than for Democrats in recent history. As such, as demographics change political alignments, some Democrats believe that Texas will vote blue, or Democratic, due to their Hispanic and African American voters, who often align themselves with the Democratic Party's liberal wing.
Blexas has been cited as possible in the upcoming decades, but only if Democrats continue to win the Hispanic vote in bigger margins.
Blexas has been cited as possible in the upcoming decades, but only if Democrats continue to win the Hispanic vote in bigger margins.
Ratfucker
Brought to public attention by Bob Woodward and Carl Bernstein in the book on the fall of Richard Nixon, All The President’s Men, ratfucker was Nixon’s term for a political operative who sows chaos among opponents; an agent provocateur. It is thought to have originated among campus political rivalries at USC, and seems to have some usage in the US military.
Along with Nixon’s other ratfuckers, Roger Stone caused fights at otherwise peaceful Democratic Party protests to generate a false narrative that the Democrats were violent and dangerous.
Ratfucker by Ricky Ramjet November 2, 2017
Word of the Day on November 2, 2026