Recent Blackstone Deal Confirms That The Market Is Rigged

A recent, questionable deal by the Wall Street behemoth, Blackstone has shaken investor confidence in the markets.  For months now, the Wall Street Journal has been reporting on a shady deal between Blackstone and Hovnanian Enterprises. One of the largest asset managers in the world, Blackstone offered Hovnanian a low-cost loan and “persuaded the builder to miss a small interest payment in exchange, which would trigger payouts on $333 million in Blackstone’s credit insurance contracts and yield the firm tens of millions of dollars, depending on market factors,” according to one article. “The insurance contracts Blackstone took out, known as credit-default swaps, typically pay out when a company defaults, usually reflecting dire financial straits,” the Journal reported. “But Hovnanian was healthy enough to pay its debts, so a default would be opportunistic.” Such financial manipulation is why some investors remain fearful of…

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