Greek Default: Why Now May Be Best Time to Do It

February 21st, 2012, 06:14 PM

zt379

How Greece Could Take Down Wall Street WEB OF DEBT BLOG

"there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS). Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt. "

"The money made by selling these derivatives is directly responsible for the huge profits and bonuses we now see on Wall Street. The money masters have reaped obscene profits from this scheme, but now they live in fear that it will all unravel and the gravy train will end. What these banks have done is to leverage the system to such an extreme, that the entire house of cards is threatened by a small country of only 11 million people. Greece could bring the entire world economy down. If a default was declared, the resulting payouts would start a chain reaction that would cause widespread worldwide bank failures, making the Lehman collapse look small by comparison."

Keith Barron "This is Financial Armaggedon, Lehman x 1,000"

My Blog

February 21st, 2012, 07:07 PM

Greek finance minister on EU/IMF bailout

reading this statement goes to show what a bunch of bafoons are running things , seriously......JMO

Greek finance minister on EU/IMF bailout - Yahoo! Finance

February 22nd, 2012, 05:31 AM

Europe seals new Greek bailout but doubts remain

Europe seals new Greek bailout but doubts remain | Reuters

February 22nd, 2012, 05:33 AM

Threshold for forced Greek debt swap is 66 percent: minister

Threshold for forced Greek debt swap is 66 percent: minister | Reuters

February 22nd, 2012, 05:46 AM

Could someone point me to a site that mentions the total amount of Greek CDs?
ISDA.org mentions a very small amount and I do not know if this is accurate.

February 22nd, 2012, 06:30 AM

capsmart

Could someone point me to a site that mentions the total amount of Greek CDs?
ISDA.org mentions a very small amount and I do not know if this is accurate.

Not sure, I've heard different amounts of Bonds to Cds numbers thrown around from low to high

I would guess Financial Information Services - Markit.com but not sure

Greek bailout deal fails to dent CDS spreads - Risk.net

February 22nd, 2012, 06:33 AM

Interesting article though Asia Times Online :: Greek knife to Wall Street

February 22nd, 2012, 06:38 AM

Greece debt cut: Some of Europe's biggest banks hit
By Ben Morris
Business reporter, BBC News

Of non-Greek banks, France's BNP Paribas has the biggest holding of Greek debt
Continue reading the main story
Related Stories

Greece: Dangerous precedent?
The banking industry has described its agreement with Greece to cut its debts as "unprecedented".

BBC News - Greece debt cut: Some of Europe's biggest banks hit

quote According to Barclays Capital, the top two holders of Greek debt are National Bank of Greece, with 13.2bn euros ($17.5bn), and Eurobank EFG, which holds 7.3bn euros ($9.7bn).

Once the bond exchange is completed, those holdings will be worth less than half their current value, and if you include future interest payments, worth 70% less.

Outside Greece, French and German banks hold the most Greek debt."

February 22nd, 2012, 06:48 AM

I don't know ....

Binding Greek Deal Would Trigger Swap Payments, Millstein Says- Bloomberg

February 22nd, 2012, 06:53 AM

Greek CDS uncertainty fuels dumping | Derivatives | IFRe

�The vast majority of Greek CDS positions are hedges,� said one head of European credit trading at a US house. �Restructuring in a way that specifically won�t trigger CDS not only undermines the product � it eliminates the insurance participants have bought to protect themselves. In effect, they�re doubly hurting participants that did prudent risk management.

�One CVA [credit value adjustment] desk told me: �We�re taking our Greek hedges off because we�re going to get screwed both ways: we�ll be forced to take haircuts and CDS won�t trigger so we lose out on the hedge. It�s the absolute worst outcome for us.� And I�m sure they�re not the only ones thinking that.�

Greek Default: Why Now May Be Best Time to Do It

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Greek Default: Why Now May Be Best Time to Do It