[Toddsterpatriot]

It's a similar deal with CDS's.

So you buy a CDS on some IBM debt. How do you burn down the house of IBM?

[PapaBear3625]

So you buy a CDS on some IBM debt. How do you burn down the house of IBM?

If you have enough CDS's, more than the value of IBM, you could do lots of things to make IBM fail.

For the case of CDS's on MBS's, you just wait for the next recession.