What I heard Jon Stewart say tonight about a Blackstone credit default swap scam is about the most repulsive thing I've ever heard. The story begins with an October 22nd story in Bloomberg Blackstone Unit Wins in No-Lose Codere Trade: Corporate Finance.
Weeding out the comedy because there is nothing funny about financial weapons of mass destruction, this is the way Jon Stewart put it;
Earlier this year Blackstone bought something called a credit default swap on debt that Codere owed to a third party. Which means Blackstone would make money if Codere blew a lone payment to the other guys. So far, so good.
Then a short time later Blacksone offers Codere a $100 million loan with the condition that Codere pay the other loan to the other company late. The loan Blackstone had already bet that they would in fact pay late.
So Blackstone loans $100 million. Codere deliberately pays the other loan two days late. A credit default swap is triggered and Blackstone collects $15 million in insurance money.
Then Jon Stewart compared it to a scene for Goodfellas where it would actually be illegal and the rest of the segment was about how the financial media is not covering these legal stick up artist.
Since Bloomberg is financial media I wasn't all that impressed by the lack of media claim but after all the pain and suffering caused to this nation by credit default swaps I do have one question. Who the fuck is running this country and why is a clear cut case of insurance fraud still legal?