Financial Arson Report: This Time It’s Blatant
Don’t say I didn’t warn you (in particular, don’t say I didn’t warn you on September 25 2008). Naked CDS make financial arson profitable. It is also, probably, legal. It seems Blackstone made some money by threatening financial arson (arson meets grenmail).
Blackstone offered Hovnanian a low-cost loan and persuaded the builder to miss a small interest payment in exchange, which would trigger payouts on $333 million in Blackstone’s credit-insurance contracts
Robert:
How Regulators Averted a Debacle in Credit-Default Swaps On this link they should be able to read the story.
I would think a penalty for this blantant act of fraud and manipulation is to ban them from the market. There are no reserves on CDS and it could trip the entire market once again even though it is smaller that GS calling in AIG CDS on GS investments.
Naked CDS are a counter to CDS and do not require you to own the equity.
Thank you for this thread, Mr Waldmann. I read about this several
months ago and placed The Backstone firm on my ban list.
Something needs to be done to prohibit this action and or make
it criminal.
The SEC needs to take administrative action against these manipulators and or criminal charges with a massive civil fine.
Blackstone Group, one of the largest fund operator in America,
is beyond the pale for it’s lust of profits and greed. They need to
have the hammer put down.
They are evil and money lords at best.
Hans, Liber, BillyR or whoever you are; you get one ID only. Please use the same one all the time and do not change it. Thank you.
This sounds like a problem with the insurance contract. All of my insurance policies are explicitly void if the loss is intentional. Are terms to this effect left out intentionally?