Tuesday, Feb 16, 2010
Lipstick on the PIIGS
FT: The eurozone:Athenian arrangers
It's the PIIGS and others actually. We've heard of GS helping the Greeks to do a cosmetic job on their debt data with cross-currency swaps that pushed liabilities back into the future. Turns out this kind of financial alchemy is rife. Other countries have been shown by GS and the usual suspects how to bring forward their revenues and push back their liabilities. Securitisation enables countries to use future revenues from state assets - including lottery tickets, social security receipts and the future collection of unpaid taxes - to back bonds and raise cash. So you can bet on the performance of the tax man. Of course the vendors of these financial products know where these skeletons are and can use this info to make speculative attacks via CDSs
2 Comments
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1. icarus said...
Any problems just google the FT title.
One senior European Commission official said "You have the sense that banks have been playing all sides of this, making money whatever happens to Greece".
2. mountain goat said...
Anger "stems from the role that Wall Street titans such as Goldman have played in helping Greece and other eurozone countries to massage their debt data over the past decade to meet European limits – and thus to mask some of the fiscal woes that have now come back to haunt international markets."
GS is like a drugs baron preying on debt junkies. The problems we face are looking more and more like those of Mexico and Colombia with their powerful drugs cartels.