Hedge Fund Gambling: Fine, Just Keep My Tax Dollars Out of It

By: Monday May 28, 2012 9:45 am

It turns out that I have a connection to the whole JPMorgan Chase Fail Whale trades. The guy who led the hedge fund pushback against the London Whale, the one who took the other side of the bet, the one who made the profit off of JPM’s massive loss, is a guy named Boaz Weinstein. [...]

JPMorgan’s $2 Billion Loss Shows Impotence of the Volcker Rule

By: Friday May 11, 2012 6:18 am

I spent most of yesterday afternoon laughing my ass off about Jamie Dimon’s London Whale loss, but it’s actually not all that funny. JPMorgan Chase revealed a $2 billion loss on a bad bet they made on a credit default swap index trade. They described it as an egregious, self-inflicted mistake. I think Felix Salmon [...]

Derivatives Overseer Rules Greek Debt Swap a “Credit Event,” Leading to CDS Payouts

By: Saturday March 10, 2012 8:55 am

The International Swaps and Derivatives Association ruled yesterday that the Greek debt restructuring deal will trigger about $3 billion in credit default swaps, a tiny fraction of the total CDS insurance on the loans. This makes the debt swap a partial “credit event,” or default. Billions of dollars are to be paid out in insurance-like [...]

Derivatives Governing Body Says Greek Debt Swap Not Default Event

By: Friday March 2, 2012 7:35 am

Well that’s one way to solve the nagging problem with the Greek debt restructure triggering credit default swaps: just get the governing body to pretend the whole thing is voluntary. There will be no payouts to investors holding bond insurance contracts on Greek debt, a committee of bankers and investors ruled Thursday. The decision by [...]

Greek Debt Talks Still Without Resolution; Bondholders Make Final Offer

By: Monday January 23, 2012 6:20 am

The debt talks between Greece and their bondholders, thought to be a done deal late Friday, spilled into the weekend and still found no resolution as of today. The short version is that the creditors want a higher coupon, or interest rate on the new bonds they’ll accept in exchange for taking at huge hit [...]

The Hedge Funds Threatening to Blow Up Greece

By: Wednesday January 18, 2012 7:22 am

We’ve told this story a couple times, but apparently what happened is that a lot of European banks and other investors held Greek debt, and they were able to quietly sell it to a group of hedge funds, who picked it up very cheaply. The hedge funds have no interest in taking a haircut on [...]

European Crisis: Multiple Credit Downgrades, Greek Debt Talks Collapse

By: Friday January 13, 2012 2:33 pm

Europe has lived in an almost perpetual state of collapse lately, with promising deals followed by despair. Today was one of the despair days. First, Standard and Poor’s cut the credit rating for nine Eurozone nations, including France, which previously had AAA-rated debt. S&P lowered its long-term rating on Cyprus, Italy, Portugal and Spain by [...]

OECD: Growth Slowdown Expected Among All Industrialized Nations

By: Monday November 14, 2011 9:35 am

Whether the forceful installation of leaders unaccountable to their populations will “save” the euro project or not reflects an effort to solve the wrong problem in the industrialized world. If the changes to governments in Greece and Italy succeed – and that’s no guarantee – they plan to supply more rounds of painful austerity on [...]

The Bond Market Makes Its Move in Greece

By: Tuesday July 5, 2011 9:49 am

The news that Standard and Poor’s, a rating agency, will not sign off on the proposed Greek debt deal shows a dysfunction in the modern international financial system, and all of its competing claims. You have a country, Greece, which needs to restructure its debt. The set of countries in the European Union that’s backing [...]

Greece Could Hold the Cards: Credit Default Swaps Bigger Than Greek Debt

By: Wednesday June 22, 2011 10:10 am

Yesterday, Greek Prime Minister George Papandreou survived a no-confidence vote without one defection from his Socialist party colleagues. As soon as today (though probably next week), they plan to pass an austerity, tax and privatization package that will secure them 12 billion euros in needed funding to pay off debt, which should be able to [...]

Damage From Debt Limit Hijacking Has Already Begun

By: Tuesday June 7, 2011 2:16 pm

The latest steaming pile of garbage from the right to justify continued inaction on the economy is that Obama giving a speech on April 13 sank corporate confidence and ruined everything. Aren’t these the same people who grudgingly admit that Obama gives a good speech, but that actions mean more than mere words? Apparently accurately [...]

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