It is my opinion that that things like Hedge Funds CDS, Mortgaged
backed securities, and worthless debt obligations like student loans are
actually structured and held corporate balance sheets, unbeknownst to most. The Banks, Hedge Funds, and Corporate Insiders
I believe, work in concert on a mutually beneficial level, for the purpose of
rigging the game.
This is how it
tends to look;
On and On.....
The object seems to be to leverage to the max, acquire dozens of BVI entities
and their associated debt obligations, insist on issuing 10% debt to pay back
interest free credit facility with bank, make interest free promissory loans to
insider controlled entities, accept loans from insider controlled entities with
high interest and collateral requirements, and inflate the value as high as
possible under any means necessary so the hedge funds have no problem layering
into short exposure via equity, bonds, and CDS…so they synthetically can get
short things like student loans, Greek debt, muni bonds or whatever disease their
pal John Corzine was instructed to with.
This is how it
tends to look;
1. A group of
hedge funds all purchase equity interests in a listed company.
2. The hedge funds
elect new board of directors
3. The directors
replace management with someone of low moral regard who has a fetish for
excessive leverage.
4. Banks extend a
line of credit to the company
5. Company starts aggressively
making asset purchases and entering into agreements (Land/Coal/Trees/Rights,
etc), with either third parties or entities controlled by insiders themselves.
6. Company starts
issuing convertible debt, bonds, and private placements; funds raised are used
to pay back line of credit.
7. Company
partners in joint ventures as part of a growth strategy due to "rosy
prospects".
(Without digging
through hundreds of corporate fillings on several different exchanges, you'd
have no idea a pair of US based distressed debt hedge funds with loads of toxic
paper they are looking to dump, are overseeing the development of a casino in
Macau
8. Company starts acquiring
bigger and bigger stake in the joint venture, paying higher and higher prices
which helps inflate their balance sheet…an important point for leverage
purposes. The payment is in form of both
cash and stock, which very well could be used to construct equity swaps and
actually get short!
9. Ask Carl Icahn
to start spewing lies on T.V about his intention to take the company public, (like
WCI Communities or the dozens of other firms he comes in to bid for at the
absolute top)…as means to goose the market so he can dump (or probably even
short)…
On and On.....
The object seems to be to leverage to the max, acquire dozens of BVI entities
and their associated debt obligations, insist on issuing 10% debt to pay back
interest free credit facility with bank, make interest free promissory loans to
insider controlled entities, accept loans from insider controlled entities with
high interest and collateral requirements, and inflate the value as high as
possible under any means necessary so the hedge funds have no problem layering
into short exposure via equity, bonds, and CDS…so they synthetically can get
short things like student loans, Greek debt, muni bonds or whatever disease their
pal John Corzine was instructed to with.
I will be writing about XXX and XXX in the next few days; which I believe on the bearish China story alone make
great shorts, however I have some serious concerns in regards to their
financials, certain people’s involvement, risk of certain obligations hidden on their balance sheet, potential legal concerns, as well as the most SERIOUS concern....synthetically being used to short China REIT?
Spectrum Brands is another short in my opinion. After reading about that $104 million whistleblower payout, I’m putting together a piece on why Philip Falcone should
be criminally charged.
Anyone interested in a report on the equities mentioned
above , similar to this one, shoot me an email. The reason I started this blog and continue to post is with the intention of getting a couple consulting agreements, so if you are interested please contact me.
Regards,
Donald Shekels
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