How did the global CDO/Derivative 'scam' work? Our future?

[WhiskeyGirl]

There are 7 stages to executing a successful sting operation. Whether this is the modus operandi behind the Sultans of Swap operating in the $605 Trillion OTC Derivatives market or just simple coincidence, I will leave it to you shrewd reader to determine. The seven stages do however offer us an instructive theater guide to better understanding these murky instruments called Interest Rate Swaps.

US - NY STATE MUNICIPALS

In The Swaps That Swallowed Your Town the New York Times shows that there is widespread use of Interest Rates swaps across US Municipalities with extremely negative consequences now showing up that were not understood when the PRODUCERS and BANKSTERS made their presentations. Though I failed to see clear proof in their examples of the adoption of the Novation agreement being used in Europe, this doesn’t necessarily mean it is not being used or there is derivation from being employed in the US. What I found interesting was that the CEO of an advisory firm on this subject is quoted as saying ““We need transparency where Wall Street discloses not only the risks but also calculates the potential costs associated with those risks. If you just ask issuers to disclose, even in a footnote, the maximum possible loss or gain from the swap, they probably wouldn’t do it.” (1) The audience must surely notice that the DIRECTORS in our play are now completely asleep on stage though another frustrated call is heard from Harry Markopolos over the stage loud speaker.

And here ladies and gentleman – watch closely – we have the sleight of hand mentioned earlier.

Everything is aimed at getting debt off the balance sheet. Whether through SPE (Special Purpose Entities) of various descriptions or conduits such as SIV (Structured Investment Vehicle) the shell game is all about avoiding the “d” word or Debt.

A LOAN is a debt and must be accounted as A LIABILITY.

A GUARANTEE is not a loan! It is a CONTINGENT Liability.

A Guarantee is something that accountants refer to as a “contingent liability”. The operative word here is “contingent”.

lots more here - http://news.goldseek.com/GoldSeek/1268419130.php

Lots of links to more stories...see the global rip-off/hood wink/con explained.

my opinions