Jul

8

A question emerges as to why the big flexionic institutions are paid off as in Lehman with 29 billion the day before filed for bankruptcy. Okay, the short answer is that no one else will lend to countries like Argentina or Greece so they are given 'preferred creditor status' ahead of everyone as a condition of the loan, and that status does not preclude being paid off the day before bankruptcy or insolvency and that's why those institutions never lose money. But I think this might be only part of the answer as why would all the creditors allow some entity to come in ahead of them and get secured debt first in line when they are holding debt that will be of a more junior status. I believe it's a variant of what my friend and former boss, the Markster likes to say: "its always been this way from the beginning of time. The purpose of markets is to make money for the flexions".


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search