From ProPublica
''Credit default swaps are insurancelike derivatives, or side bets, that protect investors from bad events like a company going bankrupt or a country failing to pay its debts.
Whether a company has defaulted on its debt might seem unambiguous to some naïve souls out there. But that's hardly the case, especially when there are lawyers involved and billions of dollars at stake. Because credit default swap contracts can be worthless when they expire, the timing of insolvencies can be worth a great deal of money.''
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