Courtesy of Karl Denninger of The Market Ticker
Bankers are furious that two defaulting Saudi conglomerates that owe $20 billion (£12.2 billion) appear to be favouring local banks over foreign creditors. State-owned Royal Bank of Scotland, HSBC and Standard Chartered are all understood to have exposure to Saad Group and Ahmad Hamad Algosaibi & Bros (Ahab). Dozens of other Western banks are also owed money, including Citigroup and BHP Paribas.
You banksters were perfectly happy when you got preference you weren’t entitled to last year!
Remember that? You got paid at par on things that were worth much less and in many cases zero. AIG Credit Default Swaps anyone? GM bonds? Chrysler bonds? Various bank deals that "protected" bondholders that should have taken losses, while screwing non-bank debtholders and others?
I have raised hell about the refusal to honor the sanctity of the capital structure in these pages since, well, The Market Ticker began publication.
But I haven’t seen any of you banksters complain when the favoritism and violation of the capital structure favored you!
Now, suddenly, Saudi Arabia is joining the ranks of defaulting Arab nation-state-projects, and they’re doing the same sort of thing to foreign holders that those very same banks did to other people last year, in many cases bankrupting them outright.
Angela Knight, head of the British Bankers’ Association, said yesterday: “This is an important issue for our members and one we would like to see resolved as calmly and quietly as possible.”
Funny how secrecy always is a primary concern when you’re the one looking for something different…. and especially when you just got done screwing everyone else in the world a short time ago.
I hope The House of Saud tells you where to stick your mendacity.
You saw the flash over Thanksgiving with Dubai. You’re welcome to believe that the 1500 degree wall of air and overpressure won’t arrive if you’d like, or that the plume of fallout won’t blow your way, even though the wind was in your face while you were facing that flash.
Go ahead folks.
Believe that all the bailouts and handouts that favored people who shouldn’t have been, who protected lenders from their foibles and bad judgment, along with outright fraud, has no long-term consequence.
That you really are the most the important people in the world – and that the rule of law is just a suggestion when you’re concerned.
I wish you the best of luck.
PS: Saudi Arabia hardly needs your "credit" – they have this black stuff you want them to sell you so your fancy Lamborghini will go from point "A" to "B". Without it, you have a very expensive but utterly worthless hunk of red steel. Oh, and they’re well-aware of this fact. Think about it.