As if the current financial meltdown resulting from mortgage credit default swaps weren’t enough the banks are at it again: http://www.huffingtonpost.com/2010/04/27/banks-bet-against-us-citi_n_553891.html  The same people are involved, it’s just a variation of the original game. JP Morgan, Bank Of America and Citigroup are selling credit default swaps on municpal bonds. This is basically a bet made with other banks, investor groups or hedge funds.   They are betting that U.S. cities and states will not be able to meet their obligations  on money owed to municipal bond holders. Sound familiar? There still aren’t any laws to stop the banks and hedgies from making these bets against cities and states.  The banks understand that the risk factor is nil, since the U.S. taxpayer will once again be expected to pay off any default swap payments that they may be unable to meet.  What this does is create an incentive for CDS holders to push government entities into bankruptcy, thus creating a payoff for any institution that holds a swap.  It also will make it harder for cities and states to raise money for funding projects and most likely raise the interest rates on municipal bonds. Higher interest rates mean taxpayers will have to shell out more dollars to fund state and local projects. Guess who makes more money from the higher interest rates? That’s right the same people that are selling the swaps. Since there are no limits on how many of these swaps can be sold (which means their is no limit on the bet or the payoff) the amount of money at stake could become astronomical.   This situation is beyond belief.  Placing incentives for bankrupting our government is treasonous. Where are our elected officials? Where is Obama? Oh, there he is playing golf with the banksters: http://perdidostreetschool.blogspot.com/2010/04/crooks-in-washington-play-golf-with.html or maybe having dinner with the banksters: http://beforeitsnews.com/story/19752/Obama_dines_with_his_favorite_banker_today.html or here : http://blogs.suntimes.com/sweet/2008/10/obama_interviewed_by_brokaw_at.html or here: http://cfd.net.au/home/article/goldman-director-gupta-dines-with-obama-deals-with-rajaratnam-bloombergcom-20100421  I think you get the message.