Lehman CDS: Detonation or Dud?

Welcome to the first real post of Global Tinfoil Analysis, dedicated to raising tinfoil-related awareness across planet Earth. Shout outs to Mish and his band of merry Deflationistas!

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As some of you may know, Friday (10/10/2008) is when Lehman's CDS trades will be settled. Let me get to the point: Will this blow up the system? Or will this explosion be a dud? Was it on purpose? Who benefits? Let us review the facts.

1) Lehman was the only investment bank which was allowed to 'fail' (enter formal bankruptcy). Wait one damned minute here. You mean to tell me the Fed was willing to bail out EVERYONE except Lehman? Did Lehman miss the Rothschild's Christmas Party or something? This whole thing makes no sense.


Warren 'Bailout' Buffet, Arnie the Bankrupt Governator, and Lord Illuminati Jacob Rothschild Masonberger the 33rd (also known as 'Master') at the private Rothschild estate in Scotland

2) JP Morgan helped orchestrate the failure of Lehman by revoking a line of credit.

“The creditors’ committee understands that LBHI [Lehman Brothers Holding Inc] had at least $17 billion in excess assets which were held at JPMC [JP Morgan Chase] on the Friday going into the weekend before its bankruptcy filing,” the documents said.

“The creditors’ committee further understands that, on September 12, 2008, JPMC refused to allow LBHI access to its excess assets and instead ‘froze’ LBHI’s account. In freezing LBHI’s assets, JPMC was purportedly holding all of LBHI’s assets as a potential offset against any claims JPMC may have had against LBHI.”

The filing goes on to claim that “as a result of JPMC’s actions, LBHI suffered an immediate liquidity crisis, that could have been averted by any number of events, none of which transpired”.
source

3) We know from court documents that JP Morgan forwarded Lehman an illicit 'payment' of $138 billion AFTER Lehman declared bankruptcy. JPM and their associated criminal syndicate was immediately reimbursed by the Federal Reserve for the said $138 billion, in two payments, and the whole fraudulent enterprise was to ostensibly to settle 'client' transactions (of which JP Morgan was the likely counterparty).


source: Rob Kirby


So why? What is the point of this? Well, my tinfoil aware friends, the 'point' may be to initiate a 'controlled demolition' CDS cascade with which the power that be can consolidate their near fascist death grip on the global financial system. As many are aware, JP Morgan is a front for a dangerous criminal syndicate, has national security exemption on its 'trash can' balance sheet, and JPM may be operating as a proxy, wishing to cause further market carnage as a pretext to consolidate the global financial system under Russian and Chinese control, via a handful of insider US banks and the Federal Reserve cartel, who in turn are traitors looking to further their own control and hand of 'leadership' to the far East.

In simpler terms, Hank Paulson is working for the Chinese.

Now this Lehman CDS 'doomsday' scenario only happens if the CDS trades are settled for say, 50c on the dollar or worse, because then any of the casino players will have to cough up the cash to settle the difference. Whoever is holding the Queen of Spades, aka the Derivatives Bitch Queen is going to be yelling "SELL MORTIMER SELL". But this all depends on how Lehman's CDSs trade on Friday, who can get ahold of the bonds, the prices, the orientation of the moon, and possibly whether I eat eggs for breakfast.

But the storm clouds are brewing.

NEW YORK, Oct 8 (Reuters) - The value of credit default swaps backed by defaulted Lehman Brothers bonds will be set on Friday, with protection sellers expected to face massive losses of around 90 percent of the insurance they sold.

Bondholders have seen their investments virtually wiped out by Lehman's bankruptcy filing on September 15, with most of the defaulted bonds which will be used to settle the swaps trading in the area of 12-to-13 cents on the dollar, according to MarketAxess.
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0841811720081008

Some may ask, just how many hallucinated debt-pixels are at stake with Friday's Lehman CDS settlement?

Well, we are looking at $200 BILLION to $1000 BILLION. Yes, aka , Katie Bar the Door because this ain't just a minor weapons malfunction.

http://www.portfolio.com/views/blogs/market-movers/2008/10/07/awaiting-the-lehman-cds-auction?addComment=true

Of course, it'd be nice if this was a complete dud, a wet firecracker like Monday's Fannie and Freddie CDS, which recovered 92c on the dollar on the multi-trillion mortgage fraud sewers. But will Lehman have the same luck? Will Lehman receive the Wet Firecracker Award? Or, more likely, is this the beginning of a controlled demolition of the CDS market, courtesy of JPMorgan and the Federal Reserve?


I don't know the answer to these questions, but I do know this is one potential 'grey swan' which may about to be sucked into the New World Order debt engine / derivatives death star.