Greece And Credit-Default Swaps

A funny thing happened on the way to the Greek bailout: Credit-default swaps involving Greek debt—the same kind of financial instruments that triggered the 2008 fiscal cataclysm—were set aside, once again protecting big financial institutions from their own irresponsibility. 

As the negotiations over the write-down of Greek debt unfolded, one of the critical questions that seemed to be hovering over the markets was: Who bought credit-default swaps on Greek debt, and who would owe big sums to cover the CDS obligations if there were a default. Remember that back in the housing crisis of 2008, it was largely the inability of AIG to make payment on the credit-default swaps it had sold that triggered the cascade of incipient failures that required enormous government intervention. Remember the $182 billion investment taxpayers made in AIG—$12.9 billion of which went straight to Goldman Sachs?

In Greece, any such problem was magicked away. A special committee that governs credit-default swaps got together and said: The Greek bailout—a write down of 50 percent of the value of Greek debt—is voluntary and thus does not trigger the contractual terms of credit-default swaps. That means the companies that sold the CDSes will not have to cover the losses they had insured—the decline in value of the Greek bonds. Who votes on this committee?  This will shock you: the very banks that issue, and often purchase, the CDS’s at issue: Goldman, JPMorgan Chase, Citibank, UBS. No government entity at all. Just the same players who have an enormous interest in whether or not the CDS obligations are enforced.  And this special committee votes in secret, with no public accountability.

You can read the rest @
http://www.slate.com/articles/business/the_best_policy/2012/03/credit_default_swaps_how_wall_street_is_gaming_the_greek_bailout_.html

I don't pretend to understand the financial shenanigans which have been going on here. What I do know is that the main actors are the very same "persons" who are destroying the US economy. I expect to see much more of this kind of thing once TPP, TTIP, TISA, and similar traitorous treaties become law.

Update: Here is who owns Greece's debt:

Borrowed from http://www.globalresearch.ca/who-owns-greeces-debt/5460265