Credit-Default Hypocrites - How Wall Street is gaming the Greek bailout. | WHAT REALLY HAPPENED

Credit-Default Hypocrites - How Wall Street is gaming the Greek bailout.

Remember that back in the housing crisis of 2008, it was largely the inability of AIG to make payment on the credit-default swaps it had sold that triggered the cascade of incipient failures that required enormous government intervention. Remember the $182 billion investment taxpayers made in AIG—$12.9 billion of which went straight to Goldman Sachs?

In Greece, any such problem was magicked away. A special committee that governs credit-default swaps got together and said: The Greek bailout—a write down of 50 percent of the value of Greek debt—is voluntary and thus does not trigger the contractual terms of credit-default swaps. That means the companies that sold the CDSes will not have to cover the losses they had insured—the decline in value of the Greek bonds. Who votes on this committee? This will shock you: the very banks that issue, and often purchase, the CDS’s at issue: Goldman, JPMorgan Chase, Citibank, UBS. No government entity at all. Just the same players who have an enormous interest in whether or not the CDS obligations are enforced. And this special committee votes in secret, with no public accountability.

Webmaster's Commentary: 

So basically, how Wall Street is going to evade the Credit Default Swaps on Greece's (and eventually Europe's) default is they are going to simply vote not to honor those Credit Default Swaps, which means all those who bought those Credit Default Swaps are holding worthless paper! And now you know why Wall Street has armored defenses built right into the streets, for those occasions they screw their own customers.!

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