Fed eyes insurance contracts on Greek debt

[JBoy]

Source: Globe & Mail

Federal Reserve chairman Ben Bernanke told lawmakers Thursday that the central bank is looking into the use by Goldman Sachs and other Wall Street firms of a sophisticated investment instrument to make bets that Greece will default on its debt.

Mr. Bernanke said the Fed is looking into companies' use of credit default swaps, a form of insurance against bond defaults. Mr. Bernanke made the comments at the start of a Senate Banking Committee hearing, where the Fed chief delivered his twice-a-year economic report to Congress.

“Obviously, using these instruments in a way that intentionally destabilizes a company or a country is counterproductive,” Mr. Bernanke said, adding that the Securities and Exchange Commission probably will be looking into this matter as well.

“We'll certainly be evaluating what we can learn from the activities of the holding companies that we supervise here in the U.S,” Mr. Bernanke said.

Read more: http://www.theglobeandmail.com/report-on-business/fed-eyes-insurance-contracts-on-greek-debt/article1480901/

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Fucking vultures.

[Rapier09]

1. Line them up against a wall

Then machine gun them like the animals that they are.

It is really not that complicated.

[aquart]

9. No? How would you write the deduction for the bullets?

[420inTN]

2. Huh. Surprised they didn't make debt derivatives. nt

[Zenlitened]

3. "Counterproductive"???

"Obviously, using these instruments in a way that intentionally destabilizes a company or a country is counterproductive," Mr. Bernanke said...

Really? I think it goes a bit beyond merely counterproductive, Mr. Subprime-is-Contained.

It's an assault, a deliberate act of destruction.

I'd have thought you'd learned something from the AIG murder-suicide by now.

:grr:

Y'know, I started out this week thinking the so-called Powers That Be and all the supposedly Smartest Kids in the Room were serious about getting a handle on the Greek financial situation. That they'd actually gained, if not wisdom, at least some practical FEAR from the Collapse of 2008.

But here it is only Thursday, and I'm having serious doubts again. Mr. B's comments don't help, nor does this seemingly well-reasoned analysis which attempts to assure us that, ahem, "Greece is Contained":

Swaps Show European Contagion Won’t Reach U.S.: Credit Markets

Feb. 24 (Bloomberg) -- The risk that a government funding crisis in Europe will spread across the Atlantic Ocean is declining, bolstering corporate bond markets in the U.S., credit-default swaps show.

(snip)

The decoupling in credit risk suggests investors are betting Europe’s leaders won’t let Greece’s budget deficit, the area’s biggest in terms of gross domestic product, drag down the EU’s economy, hurting the rest of the world. Swap prices as measured by the Markit CDX North America Investment Grade Index have fallen to within the closest of the Markit iTraxx Europe index since 2006.

More:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRXWsSanuM2g&

Yep. The models are working just as predicted. Right up to the moment they cease to work at all.

Sound at all familiar?

[Ghost Dog]

11. How about phrasing such as "Direct Threat to National Security"?

Would surely be used were US debt the target.

[Bigmack]

4. I want to lay side-bets on whether...

Goldman-Sachs execs will get pancreatic cancer?

Does that make me a bad person?

[Zenlitened]

5. If you have the ability to induce cancer in an exec's pancreas...

... then yes, you'd be a bad person, at least by some old-fashioned sense of the phrase.

But not to worry. By today's definition you'd be a savvy businessman, rightfully and righteously entitled to huge sums of money for all your hard work.

And we'd know you're smart and deserving because, hey, you'd be rich. Super-super-beyond-the-comprehension-of-us-proles-rich! And rich people are rich because they always, every one of 'em, DESERVE to be rich.

Oh, and a reliable clique of sycophantic, self-appointed Sages would have your back... trying to convince us working slobs that the cancer-ridden exec should have been smarter about tending to the well-being of his pancreas because, ya know, it's a rough-and-tumble world out there.

You, blameless and in fact worthy of admiration. Cancer victim, well... shoulda known better, had it coming to him, etc.

So go for it! There's practically no downside to being a "bad person" these days!



P.S. :cry:

[sulphurdunn]

6. “The love of money is the root of all evil” 1 Timothy 6:10.

[Uncle Joe]

7. Kicked and recommended.

Thanks for the thread, JBoy.:thumbsup:

[aquart]

8. Bernanke? He just noticed they destabilize nations? REALLY?

He sounds like he still believes there's a way to use them that will NOT destabilize nations.

Can we hang him now?

[dipsydoodle]

10. BBC News link

The role of Wall Street firms in deals that may have helped Greece mask its debt woes are under scrutiny in the US, the Federal Reserve chief has said.

Ben Bernanke said the Fed and the US financial watchdog were "looking into a number of questions" related to banks' derivatives arrangements with Greece.

But he stopped short of saying an official inquiry was under way by either the Fed or the regulator.

Goldman Sachs was the only firm which Mr Bernanke mentioned by name.

http://news.bbc.co.uk/1/hi/business/8537676.stm

[izquierdista]

12. Since they like to go short

I've got some long positions in the rope market that they can take the other side of.