This video is called Gerald Celente: Hedge funds affecting the Euro.
By Ulrich Rippert in Germany:
Hedge funds speculate on Greek default
8 March 2012
Today is the deadline for private investors in Greek government bonds to decide to what extent they will voluntarily participate in a debt relief deal. The Association of International Finance (IIF), which negotiated the so-called “haircut” with the Greek government, has warned of catastrophic consequences should the debt swap agreement fail to be implemented.
IIF President Charles Dallara said Tuesday that an uncontrolled default of Greece would cost more than a trillion euros, as the resulting panic on the markets spread to Spain and Italy. Under the headline “Fear of a Trillion Bankruptcy”, the German financial newspaper Handelsblatt reported Wednesday that some banks were “speculating on a decline of the euro”.
The American hedge fund Greylock was the first to refuse to participate in a debt haircut for Greece and has since been followed by other large private investors. Uncertainty over a voluntary debt solution for private creditors led to severe losses on the stock markets on Tuesday. The German DAX at one point plunged by three percent.
A voluntary debt swap is part of the agreement reached by the finance ministers of the euro zone at the end of February. Their approval for a second financial package for Greece of more than €130 billion was subject to two conditions: first, the implementation of savage austerity measures, and second, a debt haircut for private bondholders amounting to 53.5 percent of the nominal value of their Greek bonds.
The social cuts were adopted by the government and parliament in Athens in the face of increasing popular resistance. But private creditors are stepping up their own offensive and demanding new conditions.
This is despite the fact that the banks and investment funds involved in the debt deal have already been compensated. The new €130 billion “bailout” package for Greece involves transferring €93 billion to the banks in return for their write-off of €107 billion of the face value of their Greek bonds. This is under conditions where the banks involved have long since written off the bulk of these bonds.
The terms of the relief packages for Greece were dictated by the banks and have led to an increase in the financial and political power of the international financial aristocracy. As a result, the reactionary profit motives of a handful of the most rapacious private investment groups are now able to determine the fate of Greece and other euro countries.
Under the headline “Hedge Funds Threaten Debt Deal,” the Süddeutsche Zeitung writes: “Hedge funds with racy names like Marathon, Saba or Vega hold up to a quarter of the Greek bonds held in private hands.” The newspaper points out that if a number of other hedge funds follow the lead of Greylock, the acceptance rate of the deal rapidly falls below the necessary 90 percent.
What is publicly presented as the financial markets’ “sacrifice,” a “waiver” by private creditors, giving up over half of the value of their Greek bonds, is in fact a financial gift to the banks; here.
On November 4 US prosecutors imposed a $1.2 billion fine on hedge fund SAC Capital Advisors for engaging in insider trading “on a scale without known precedent.” The hedge fund is owned and managed by Steven A. Cohen, who has become enormously wealthy through SAC’s operations. His 2012 net worth was estimated at $9.4 billion: here.
- Yanis Varoufakis: Johnny (Paulson) Got His Gun and is Aiming at Bigger Subsidies for His Greek Bank Investments (nakedcapitalism.com)
- EuroZone Profiteers: Welcome to the Casino (corpwatch.org)