ZeroHedge: Sigma X (Goldman Sachs) Trading Suggests European Contagion May Be Shifting From Italy To The UK! Goldman Bet Against Entire European Nations!

• Illuminist banksters are positioning the chess pieces for a catastrophic sovereign debt collapse. When they are ready, they will pull the plug on this giant debt ponzi scheme called the world economy! Look at what the snakes are doing: betting against the survival of the Eurozone! Who owns all the big banks and hedge funds of the world? Draw your own conclusions! (emphasis mine)
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  Sigma X Trading Suggests European Contagion May Be Shifting From Italy To The UK
  by Tyler Durden, http://www.zerohedge.com/
  Over 3 weeks ago, before Italian treasury spreads blew out by several hundred basis points, and before Italian bank stock trading halts became a daily occurrence, we suggested that the European contagion was shifting to Italy based on Goldman dark pool Sigma X trading. To wit: “Today’s most active names are Banca Monte dei Paschi di Siena, Unicredit and Intesa Sanpaolo. Translation: someone is actively positioning for serious action in Italy shortly.” That someone sure was right, and it is precisely this trifecta of stocks that at last check was halted on the Borsa. Well, based on today’s action at Sigma X, the next, and probably biggest domino may be about to fall: the UK itself, because coming in at position #2, just behind UniCredit, we see Lloyds Banking. And if Lloyds goes, the ones that will follow are Barclays and RBS. At that point, the financial crisis goes global.
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  Goldman Bet Against Entire European Nations – Who Were Clients – the Same Way It Bet Against Its Subprime Mortgage Clients
  by http://www.washingtonsblog.com/
  It is well-documented that big banks like Goldman Sachs made money by betting against investments which they themselves bundled and sold to their own clients, such as packages of subprime mortgage-related products such as collateralized debt obligations. This practice not only was illegal and unethical, but actually worsened the subprime crisis. See this, this, this, this and this. But did you know that the big banks did the same thing with entire European nations? As Andrew Gavin Marshall notes:
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  Greece  has a total debt of roughly 330 billion euros (or U.S. $473  billion).[New York Times] So how did this debt get out of control? As it turned out,  major U.S. banks, specifically J.P. Morgan Chase and Goldman Sachs,  “helped the Greek government to mask the true extent of its deficit with  the help of a derivatives deal that legally circumvented the EU  Maastricht deficit rules.” The deficit rules in place would slap major  fines on euro member states that exceeded the limit for the budget  deficit of 3% of GDP (gross domestic product), and that the total  government debt must not exceed 60% of GDP. Greece hid its debt through “creative accounting,” and in some cases, even  left out huge military expenditures. While the Greek government pursued  its “creative accounting” methods, it got more help from Wall Street  starting in 2002, in which “various investment banks offered complex  financial products with which governments could push part of their  liabilities into the future.” Put simply, with the help of Goldman Sachs  and JP Morgan Chase, Greece was able to hide its debt in the future by  transferring it into derivatives. A large deal was signed with Goldman  Sachs in 2002 involving derivatives, specifically, cross-currency swaps,  “in which government debt issued in dollars and yen was swapped for euro debt for a certain period — to be exchanged back into the original currencies at a later date.” The banks helped Greece devise a cross-currency swap scheme in which they used fictional exchange rates, allowing Greece to swap currencies and debt for an additional credit of  $1 billion. Disguised as a ‘swap,’ this credit did not show up in the  government’s debt statistics. As one German derivatives dealer has  stated, “The Maastricht rules can be circumvented quite legally through  swaps.”[Spiegel]
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  In  the same way that homeowners take out a second mortgage to pay off  their credit card debt, Goldman Sachs and JP Morgan Chase and other U.S.  banks helped push government debt far into the future through the derivatives market. This was done in Greece, Italy, and likely several  other euro-zone countries as well. In several dozen deals in Europe,  “banks provided cash upfront in return for government payments in the  future, with those liabilities then left off the books.” Because the  deals are not listed as loans, they are not listed as debt  (liabilities), and so the true debt of Greece and other euro-zone  countries was and likely to a large degree remains hidden. Greece effectively mortgaged its airports and highways to the major banks in order to get cash up-front and keep the loans off the books, classifying  them as transactions.[New York Times]
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  Further, while Goldman Sachs was helping Greece hide its debt from the official  statistics, it was also hedging its bets through buying insurance on  Greek debt as well as using other derivatives trades to protect itself  against a potential Greek default on its debt. So while Goldman Sachs  engaged in long-term trades with Greek debt (meaning Greece would owe  Goldman Sachs a great deal down the line), the firm simultaneously was  betting against Greek debt in the short-term, profiting from the Greek  debt crisis that it helped create.[Business Insider]

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