Fannie Mae-No Politics (FNMA)

[Donotunderstand]

yes
you are correct
but

but only if you take on amount of such paper that puts your entire retirement in danger and you are say 65 already or put your corporation at full risk of illiquidity if the spec or bet goes south. There was a ton of money to be made buying and selling both sides of the non regulated counter party CDS "market". The big boys made money on putting the deals together with pension managers and such -- the transaction profit was large and thus the writers of the paper (short and long) took say a 51-49 long or short position

High risk bets are the nature of AIG or say the MEGA re insurance companies
I have lost and won on high risk reward speculations in the equity market

But I do not put more than say 5-10 percent of my non Real Estate investment money in such bets

AIG just about bet the house - and lost - that is TOTALLY reckless because of how much they put on the table on ONE bet