The Derrivatives time bomb will ignite when Greece defaults!

IronWolf

kaya wrote: »

A very good friend was a finance director for Bear Sterns before they went under and he explained a derivative in very simple terms to me. As a banker who's job it is to buy and sell shares on behalf of investors he is exempt from paying tax on any that he buys and sells for very obvious reasons. If Douglas wanted to buy £10,000,000 of shares in a company bear sterns would facilitate the transaction for him, bears would buy the£10,000,000 of shares on his behalf under his instruction and issue him with a sort of promisary note for the shares, if his tax liability on that purchase was say 40% bears would charge him a 20% fee to hold the shares on his behalf and he would avoid paying any duty on the purchase as he never actually physically owned them (all he had was a promisary note) , this was a derivitive of the shares. so the buyer avoids 50% of his tax liability , bears earn a fee of 50% of his tax liability for facilitating the transaction but doesn't pay any tax on them as they are exempt (they don't own the shares they merely hold them for him) and the taxpayer gets nothing at all. He would regularly tell me how he had sidestepped paying tens of millions of pounds to the uk government on a weekly basis in tax and it was apparently all perfectly above board and legal and happening on a daily basis. He also regularly claimed thousands of pounds back from bears in expenses for taking clients out on the town and showing them a good time , apparently the chinese investors were partial to prostitutes and cocaine and he would regularly clock up a few thousand pounds on a single night out. His redundancy package was a very high six figure number. Can't comment on the end of the world or mysterious bankers dying im afraid
excuse the spelling and grammer but im in a can't be bothered frame of mind

CFDs dont exempt you from CGT.

Also I'm not sure what CFDs have to do with a Greek default. I would be much more worried about CDS's on Greek debt

Generali

IronWolf wrote: »

CFDs dont exempt you from CGT.

Also I'm not sure what CFDs have to do with a Greek default. I would be much more worried about CDS's on Greek debt

I can't imagine that there are massive open CDS positions on Greek debt, not without some sort of hedge on the other side.

StevieJ

Generali wrote: »

I can't imagine that there are massive open CDS positions on Greek debt, not without some sort of hedge on the other side.

Remember that guy who used to put up a chart showing Alt-a mortgage resets in the US and how it was going to crash the world financial system by 2011. What happened with that lot in the end? It was the guy who had a load of letters for his name, like Mbjapgap. I might try to find one of the posts sometime.

purch

StevieJ wrote: »

What happened with that lot in the end?

It crashed the whole system and now we are all living in Caves and eating grubs.

Well I am anyway :eek:

purch

Generali wrote: »

I can't imagine that there are massive open CDS positions on Greek debt, not without some sort of hedge on the other side.

That's the bit these loons don't quite understand.

To them the word Derivative just conjurs up some hugely complicated thing that they have no hope of understanding, but because some shouty bloke on youtube said there were trillions of dollars of them and that they were bad, then they must be.

Greece owes money, real money.

A derivative isn't real money.

Generali

StevieJ wrote: »

Remember that guy who used to put up a chart showing Alt-a mortgage resets in the US and how it was going to crash the world financial system by 2011. What happened with that lot in the end? It was the guy who had a load of letters for his name, like Mbjapgap. I might try to find one of the posts sometime.

It was called something like the Alt-A Timebomb. Something about a timebomb anyway.

Generali

StevieJ wrote: »

Remember that guy who used to put up a chart showing Alt-a mortgage resets in the US and how it was going to crash the world financial system by 2011. What happened with that lot in the end? It was the guy who had a load of letters for his name, like Mbjapgap. I might try to find one of the posts sometime.

https://forums.moneysavingexpert.com/discussion/1692639

He didn't like you very much I think. Was quite rude in fact:

Pi$$ off Steve

Not nice.

antrobus

Generali wrote: »

I can't imagine that there are massive open CDS positions on Greek debt, not without some sort of hedge on the other side.

I was surprised that you could still get Greek sovereign debt CDS. But apparently they returned last year.

Current spread 3921. I think that's a lot.:)

http://www.cnbc.com/id/38451750

Generali

antrobus wrote: »

I was surprised that you could still get Greek sovereign debt CDS. But apparently they returned last year.

Current spread 3921. I think that's a lot.:)

http://www.cnbc.com/id/38451750

Sure is.

It's not looking good right now.

StevieJ

Generali wrote: »

https://forums.moneysavingexpert.com/discussion/1692639

He didn't like you very much I think. Was quite rude in fact:



Not nice.

Oh I remember, he was an ex Brylcreem boy, strange, he disappeared in 2011 after stating this in 2009

I am shotgunning this topic on here to bask in the shaudenfreude glory in 18 months time Steve!

What did call Purch? :eek: