Mr MarkToMarket

Moral Hazard: A Danger to Our Financial System

Excellent article Tom. Further to the moral hazard issue is that a large chunk of Hank Paulson's half billion net worth is in Goldman stock. Goldman happens to operate one of the largest prime brokerages which just happen to make huge amounts from hedge funds AND are where massive naked short positions sit, nicely hidden from view, unlike at the DTCC. The true greatest urgency in the current situation is that the companies who are massively shorted and have massive CDS bets against them must undergo credit events before the naked short positions have to be unwound so the hedge funds which Goldman and Paulson are so closely linked to can cash in on their CDS plays and not have to cover the short positions. Of course, with zero transparency, how can this ever be proven?