According to CNN Finance:
"In the first half of 2013, Blackstone affiliate GSO Capital Partners purchased debt and credit default swaps in Codere SA, a listed Spanish company that operates betting parlors, online gambling sites and other gaming activities. GSO and another firm later purchased a €100 bank loan (via secondary markets) that Codere already had on the books, and then convinced Codere to delay repayment on the debt related to the aforementioned credit default swaps. That delay triggered the CDS, resulting in upwards of $18.7 million in profit for GSO.
Or, as Jon Stewart put it, they used the Goodfellas trick of taking out an insurance policy on a restaurant before burning it to the ground."
Why is this important you ask?
Well, Jon Stewart thought that it was reprehensible that the media outlets shrugged it off as if this was an ordinary day in business and failed to talk about it as much in contrast to topics such as Obamacare website failure or Canada's crackhead Mayor.
Sadly it WAS just another ordinary day in business, so Jon Stewart sought out to ruffle a few lofty feathers on his show last night to promote awareness on this topic and spark a very public conversation. The fact that Codere was advised by a reputable financial firm, Blackstone, to purposely default on their loan in order to make money is an abuse of power and violates all types of conflict of interests so it should be illegal. It should not be so openly accepted and the people should fully understand the ramifications of such actions.
Blackstone responded, saying that they would have benefited from whatever financial decision they would make with Codere and that this particular decision was to save the company from bankruptcy, basically trying to convey that it
Since Blackstone did say they were trying to help save the company let's recall the government bailout that soon followed 2008's recession resulting in thousands of people still being laid off while company execs rewarded themselves with a nice hefty bonus.
For years we were in the dark about Freddie Mac, the terrible mortgage loans and Alan Greenspan's impending housing bubble then here comes The Recession of 2008. We started to see people suffering because their lives were turned upside down with the lost of their job and consequently their home and car thereafter. It took a long time for the economy to stabilized. To this very day, many still have yet to attain the lifestyle that they once had due to the success of the financial markets. I do not know how this incident will affect us in the long run but one this is for sure that we need to put an end to things like these shady business practices especially within the financial sector where all OUR MONEY and assets tied into it keep the system functioning.
Signing Off Pink
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