Greek Bond Credit Default Swaps

This story is hilarious. Due to a legal technicality, a group of banksters declared “There is no default on Greek government bonds.” Why does this matter? If you own a Credit Default Swap (CDS) on Greek bonds, you aren’t eligible for a payout.

Greek bonds are trading at a huge discount. The yields are close to 1000%!  In other words, if you bought a Greek 1 year bond at current market prices, and no default occurred, then your return would be almost 1000%. There’s a huge default risk priced into the bond.

Obviously, with a 1000% yield, an honest person would say “A default is in progress.” According to bankster logic and State logic, no default occurred.

Who decides if a “credit event” occurred, making CDS eligible for a payout? Representatives from the 15 biggest banks get together, and vote on whether a default occurred or not. They voted “no default”.

It’s pretty obvious what happened. The biggest banks are SHORT CDS! Then, they vote “no credit event occurred”, and weasel out of paying! If they were LONG, they would have voted “Yes, the CDS get paid out.”

In the housing crash, the people who bought CDS made out well. This time, the banksters took the other side of the trade. They sold a lot of CDS, and then weaseled out of paying on a legal technicality!

Summarizing, Greece is planning to default on its bonds, by replacing them with new bonds with a lower face amount and longer duration. A committee of banksters ruled “That is not a default. If you bought a CDS from us, we don’t have to pay you. HAHAHAHA! Sucker!”

It’s a totally rigged market. You’re an idiot to participate in a rigged market. It’s rigged against individuals. It’s rigged against people at smaller banks and investment funds.

Some people bought Greek government bonds, and then bought a CDS to hedge. They thought they were being clever, locking in a nearly sure profit. The banksters cheated them, by defaulting on the CDS! It’s totally legal!

There is no Rule Of Law. The “no default” ruling on Greek CDS is a farce. The banksters robbed the people who bought Credit Default Swap Insurance, by defaulting on the obligation.

One Response to Greek Bond Credit Default Swaps

  1. Anonymous Coward March 2, 2012 at 1:50 pm

    You are quite right. It is scary. The clowns are getting more and more obvious in their theft. I am talking generally here and not just the case you are referring to.

    As government and banksters are corrupt, why should an honest citizen participate in the charade?

    One guest on Max Keiser said that why is the country so dishonest, when every single household on its own is honest. He proposed that if the top 1% are dishonest, then everyone lower done has to steal in order to survive. He made some reference to fractals looking the same at 100 feet and 1000 feet i.e. the top 1% are dishonest, so the top 20% have to be dishonest as well and so on.

    The Daily Mail had an article today on middle class benefit cheats. Previously the Daily Mail had just run article on lower class benefit cheats.

    Really the biggest benefactors of government welfare are the property owning classes that rent out to the unemployed. The housing benefit obviously goes straight to the landlords and not the unemployed.

    Rents and taxes are too high. Soon everyone will have to steal and cheat to survive.

    As everyone is robbed by inflation, the only way out is the rise of currencies like BitCoin. FSK says BitCoin has flaws. I haven’t investigated myself.

    An honest virtual currency will only be useful if it can be used to buy electricity, food and water.

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