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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (35277)	4/30/2009 5:07:37 PM
From: DuckTapeSunroof	Respond to of 71588

Keven Drum might have missed this little tidbit about the Chrysler bondholder talks: SOME of the Hedge Funds (who refused the bond swap offer) own a lot of Credit Default Swaps purchased on Chrysler --- so they collect the CDS insurance payouts only if there is a 'credit default trigger', (like a BANKRUPTCY filing!) They could have purchased ten times the value of their bonds in CDS because there is no requirement for an 'insured interest' when you buy CDS, you can buy all you want to effectively. :-) They will make a killing by forcing a bankruptcy filing and collecting the payouts from the banks who sold the CDS to them! Also... SOME of the Hedge Funds own a Hell of a lot more in GM and Ford... so if they can D-R-A-G-O-U-T a Chrysler bankruptcy... make it as slow as possible, tie everyone up in court for months or years... then Chrysler may dwindle away to nothing. Lose all of it's market share. In that case they will profit much more on their GM and Ford holdings. <GGG>