The real deadline in Greek debt is this afternoon when a private organisation, largely of banksters, decides whether insurance on this debt (collateral dervative swaps) has been trigger by the so-called credit event. A number of vulture funds have bought Greek bonds very cheap in the hope of being either to cash in on the insurance or sue the Greek Government for the full price. So the matter isn’t settled. Argentina defaulted in 2002 and is still facing court action – a New York court has just ruled against a similar settlement by them.
The banks have sold us generally useless PPI that wouldn’t pay out anyway to people who needed it, we have ‘whiplash’ and other dodgy insurance claims putting our premiums up in the increasing compensation culture and all kinds of finance supposedly guaranteed by derivatives when it isn’t. This Greek swap does mean some private interests have lost money, but the bonds in question were often held by banks, pension funds and such oddities at the French Post Office. If the muck was ever really insured the insurer should pay – and the real insurer is us and we are paying by shifting it to public sector (i.e. taxpayer) debt. All this quantitative shysterism is based on issuing insurance in order to take the fees involved, knowing the ultimate insurer (us) gave no permission. I’d say this is the equivalent of TWOC or joy riding without a car and people should be going to jail. There is no need for an intent to permanently deprive (though we have been) – insurance has been sold without there ever being any collateral to pay out, and guilty knowledge of who would have to pay out. Our money was used (including our future money) to make bets until the point no wins were there to be trousered.
The quantitative shysters are borrowing money from us to make the same bets all over again. The are shysters because we never get to know what bets they placed, who got paid out and where any of the money is. Quantitative seems to fit because their excuses are expressed in complicated numbers that actually preclude us knowing the money trail.
Goldman Sachs did the quantitative shystering that hid real Greek debt in foreign currency exchange dealing. They must have known what they were doing. And where else has this process taken place? What is the state of real value of any bonds sold under CDS insurance – the same as the 20 cents on the dollar Greek muck? This even extends to stuff like student loans (thought to be 20% in default in the US) – loans dependent on future earnings in economies getting crappier. These are about the same in total as the sub-prime exposures allegedly behind 2008.
Greece is a pimple in current liabilities. Even if it has been squeezed, expect an outbreak of acne. Of CDS is triggered this afternoon, will it be just for the amount of bonds left outside the ‘settlement’ (mostly held under British Law), or have the hedge funds been in multi insuring for a much bigger sum through naked CDS and who might have been dumb enough to sell this for a few quid knowing the bill would be footed by taxpayers?
No solution has been attempted because there is no police investigation into how much money was taken and where that is. The thieves not only don’t face criminal liability – they have also been in the position, through insider knowledge, to lay bets on the collapse they have caused. It’s like a burglar being able not only to ransack your house, but also claim the insurance payout. The Keiser Report may have elements of Radio Moscow about it, but I’m afraid it leaves BBC (Bimbo Broadcasting Corp) dead in the water on what goes on.
When you consider what must now be disclosed to the defence in criminal trials, the lack of disclosure required of banks, hedge funds and the rest so we can defend ourselves against them is Soviet.
I seem to remember that when Ireland was involved in the negotiations over the debts of a number of private banks (Anglo-Irish above all), which ultimately resulted in a supremely incompetent government rolling the country over to be serially f***ed in the arse, the question of the insurance on those loans came up. Briefly. It seems that a couple of high-ups in financial institutions on Wall Street made a couple of phone-calls. As a result, Mr Geithner – though, on paper, none of this was any of his business whatsoever – let the European leaders involved know very clearly that any claims on this insurance, which had been taken out in Wall Street, would not be honoured. The rest, as they say, is history.
This insurance is on bonds under English Law Francis – and there are vested interests seeking payout. We shall see over next weekend.