Josh Sigurdson talks with author and economic analyst John Sneisen about the recent drop in investor confidence following the exposure of Blackstone’s credit default swaps.
Blackstone’s credit default swaps had an engineered default and the CFTC slapped them on the hand.
In what can only be considered a shady deal, 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 and yield the firm tens of millions of dollars, depending on market factors” according to the article we examined at Seeking Alpha.
Usually in dire financial straits, insurance contracts like Blackstone’s credit default swaps pay out when they default.
This kind of manipulation spooks markets and scares people away, and rightly so. The derivatives bubble world wide is estimated to be about a quadrillion dollars. More than all the wealth in the world. Once this fake money is recognized, that will be one of the biggest market and monetary calamities we’ve ever seen.
The bubble continues to inflate and market manipulation is a normal. We’ve seen this crash markets in the past, but this time, the market has been centralized and propped up so much via the hand of rigging that the fallout will be catastrophic.
The fundamentals are off the table due to the level of manipulation (of course) in the markets and the monetary system, so we cannot put a date on the coming crash, we just know that it inevitably has to happen and for that reason we must prepare ourselves for the worst. After all, it’s better to be overly prepared than under prepared.
With the return of collateralized debt obligations, collateralized loan obligations, credit default swaps, mortgage backed securities, auto backed securities and all the insanity of the past, we must learn to decentralize and protect ourselves and our purchasing power.
One must act as an individual and break free from the centralization and control. One must be self sustainable and financially responsible. If you understand the problem and take action as an individual, you can shelter the coming storm.