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).

WSJ (via Drum)

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

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