Post by jeffolie on Nov 5, 2007 11:51:20 GMT -6
And if credit conditions in the market for the likes of Citigroup, MBIA, and Merill Lynch are getting dicey, what is the likelihood that obscure ABC hedge funds credit “insurers” in the Cayman Islands will even be there to answer the “pay up now” fax? You see, the whole idea for ABCs existence in the first place was as a scam to skim insurance premiums. The idea was certainly never to actually pay up for meaningful claims. That’s why in coherent and transparent financial systems there are regulators around who monitor insurance transactions. That “small detail” was just ignored and on a grand scale in the fee generation Ponzi scheme. Pig Men and their minions instead ran amok.
It was just more smoke and mirrors illusions that allows the negative selection “money managers” to claim that their asses are covered in a pinch.The idea was not to do the “right thing”, it’s more about having a defense when Aunt Millie sues when her investments and savings blow up under your watch. These “money manager” clerks will most certainly have to explain why they didn’t have a clue who the counter-parties were to a judge, but the dockets will be jammed with similar cases, and there will be nothing much to collect. The more serious counter-party criminals behind the facade have long ago stuffed their ill got gains into the rat lines. Doug Noland writes about the sheer scale of this farce, I mean “market”.
According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the International Swaps and Derivatives Association we know that the total notional volume of credit derivatives jumped about 30% the past year to $45.5 TN. And from the Comptroller of the Currency, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June. It today goes without saying that this explosion of Credit insurance occurred concurrently with the expansion of the riskiest mortgage (and other) lending imaginable. It’s got “counter-party fiasco” written all over it. The inability to hedge rising default risk has become and will remain a major systemic issue.
wallstreetexaminer.com/blogs/winter/?p=1202#more-1202
It was just more smoke and mirrors illusions that allows the negative selection “money managers” to claim that their asses are covered in a pinch.The idea was not to do the “right thing”, it’s more about having a defense when Aunt Millie sues when her investments and savings blow up under your watch. These “money manager” clerks will most certainly have to explain why they didn’t have a clue who the counter-parties were to a judge, but the dockets will be jammed with similar cases, and there will be nothing much to collect. The more serious counter-party criminals behind the facade have long ago stuffed their ill got gains into the rat lines. Doug Noland writes about the sheer scale of this farce, I mean “market”.
According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the International Swaps and Derivatives Association we know that the total notional volume of credit derivatives jumped about 30% the past year to $45.5 TN. And from the Comptroller of the Currency, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June. It today goes without saying that this explosion of Credit insurance occurred concurrently with the expansion of the riskiest mortgage (and other) lending imaginable. It’s got “counter-party fiasco” written all over it. The inability to hedge rising default risk has become and will remain a major systemic issue.
wallstreetexaminer.com/blogs/winter/?p=1202#more-1202