A guest blogger at Simon Johnson’s Baseline Scenario laments

potent credit default swaps, a key ingredient to the [economic] crisis. The existence of this $60 trillion (now $45 trillion) notional value market, protecting and connecting counterparties across the system, led to a $180 billion taxpayer-funded bailout of AIG.

She notes that one of their champions was Bill Clinton’s Secretary of the Treasury, Larry Summers. And she reminds us that “during Larry Summers’s tenure [as president of] Harvard, certain swaps were put in place; then, according to Nina Munks of Vanity Fair, ‘for reasons no one can seem to explain, the university simply forgot to (or chose not to) cancel its swaps. The result was a $1 billion loss.’”

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2 Responses to “A billion here, a billion there…”

  1. University Diaries » Law and Hoarders Says:

    […] Right. With a mandate, Larry Summers, when he was president of Harvard, wouldn’t have been able to put together those clever credit swaps. […]

  2. University Diaries » Harvard’s Pride Says:

    […] President Credit Swaps is once again on the move! […]

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