Can you explain Credit Default Swaps?

How they "work" in plain talk without a lot of arcane economic jargon?

Answer the following questions clearly and briefly, using your OWN WORDS: 1.Describe the turnover of swaps in the Australian Over The Counter (OTC) market. 2.Compare the features of overnight indexed swaps to that of plain vanilla, fixed-for-floating...

The way I've heard credit default swaps explained is that if I buy swaps on Acme Co's debt, and Acme defaults, I wait until the recovery amount is decided, and get paid based on that. So if bondholders get 15 cents on the dollar, I get 85 cents for every...

Banks are preparing for a rise in defaults on credit card debt. That debt is securitized, and although home-equity loans have overtaken credit-card debt since 2003 it still makes up a good percentage of asset-backed securities. Are those credit-card...

Can retail investor use Credit Default Swaps. or FX Swaps. if YES Where from or which broker?

I heard Bill Ackman saying a while back that if Herbalife were to privatize, he would simply short the company through other avenues such as through credit default swaps. I understand the basics of CDS securities, but I thought they only secured the...

I can't choose best answer because I'm not at level 2. The main thrust of question is, since BK's have underwritten the CDS (credit default swaps) they don't have the $$$ to pay the $32 Trillion. So how do they duck that, or do we have another "...

According to CNBC's website, it costs $54,000 to insure $10M of Switzerland's debts via Credit Default Swaps. The only problem is that I don't have $54,000. Would it be possible for me to enter CDS for $1M of debts or even $100,000 of debts instead?...