Wall Street Firm Structured Totally Legal, Ingenious Trade That Was Guaranteed To Pay Out

A unit of Blackstone Group, the world's largest private equity firm, essentially paid a company to purposely miss a debt payment in order to profit on credit default swaps (CDS), Bloomberg's Mary Childs reports.
In a brilliantly crafty deal, Blackstone was guaranteed to make money.

CDSs, a kind of insurance against defaults and missed debt payments, were one of the main culprits in the global financial meltdown. Regulators have tried to make them more transparent, with limited success.

Here's how the deal went down, according to Childs:

More