clag

According to Andrew Clavel "credit clag" are those assets that look like shit on your books, so you have to flush them into an SIV, and then when the public discovers your "credit clag", you have to wipe your ass clearly off the 'record books', and buy back your own shit at thirty cents on the dollar and then recycle it to the next fool!.

According to "the Penny King", "clag is anything put out by the Octodragon to give us the illusion of value. When banks run out of things to hold onto as collateral, including your own signature as a promise to repay, they have to begin inventing new illusions to use as collateral, like deeds to property that doesn't really have borders other than those illusory ones in the figments of the bankers and lawyers imaginations. Anyone that sells you anything for more than a penny is trading in 'clag', so said the Penny King in Los Angeles County on December 23rd, 2007.

From about 2000-2008 many investment banks purchase credit default protection from each other allowing them to get a lot of credit clag off the books allegedly in order to improve reported numbers for the period.

In 2008 under adverse default conditions the biggest banks with the worst net exposures all go bust, their sold protection is worthless and it triggers the collapse and disappearance of more than $50 trillion in illusory liquidity in the global financial markets.

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