Posted on 03/09/2012 12:41:14 PM PST by Kartographer
Greece triggered the payment on default insurance contracts by using legislation that forces losses on all private creditors, the International Swaps and Derivatives Association said on Friday.
Greece said it would use this legislation, known as a collective action clause, to force private creditors into a bond swap. This follows creditors' voluntary tendering of 85.8 percent of the 177 billion euros in bonds regulated by Greek law. The use of CACs should boost participation to 95.7 percent.
(Excerpt) Read more at reuters.com ...
In English, they’ve defaulted.
And the market thinks they’ll default again. The new 4%, 30 year bonds being issued to replace the old bonds are trading on a “when issued” basis at 20%+ yields...
Who is next? Spain?
“Who is next?”
IMHO, Cyprus will fall once the CDS event begins to get sorted. Soon after will be Portugal, Ireland, Hungary. And Belarus will default again.
Soon after that will be Egypt, Lebanon, Syria and possibly Montenegro and Bosnia/Herz.
As this progresses, the situations in Turkey and Italy are going to deteriorate substantially as they lose the ability to secure Letters of Credit from their regional trading partners.
I would go with Portugal. They like Greece don’t have much of a manufacturing economy. That would probably hit Spain the hardest from what i’ve read because their banks (again,what i read) hold substantial amounts of Portuguese paper.
First domino falls .....
Good. The ISDA could not take any other position and retain any semblance of legitimacy.
Interesting.... I was sure that the ISDA would joint the “Conspiracy” and claim that no default occurred. Short term, this will send financial stocks into a tailspin. Long term, however, its good news because it will mean that (endless bailouts aside), fiscal defaults have consequences. Anything that empowers the Bond vigilantees is good.
Not triggering the CDS policies would have been the end of CDS policies in Europe, and would have raised borrowing rates for Greece (and probably the rest of the PIIGS) sky high, because it would be more difficult to insure against default risk.
Portugal next.
Portugal next.
http://www.reuters.com/article/2012/01/27/us-eurozone-portugal-idUSTRE80Q0PJ20120127
http://www.creditwritedowns.com/2012/01/portugal-greece-comparison.html
http://www.dnbcustomer.com/?elqPURLPage=184
http://harveyorgan.blogspot.com/2012/01/all-eyes-turning-to-portugal-as-greek.html
If all of the defaults you expressed in your post were to materialize, wouldn’t that take down France as well, since they would now have to write down all of their loans on these nations?
The vast majority of all CDS contracts were issued by the five big USA banks. They know that they have the Bernank in their pocket: he’ll cover their sorry asses every time. They are members of the Club, the CBL, the Bankster Mob.
I’ve grown tired trying to guess when the dominos’ fall will gain momentum.
Regarding Egypt, which I believe will go literally bankrupt, as in no amount of smoke and mirrors will be able to hide bankrupt, is fast fast approaching.
http://blog.atimes.net/?p=2013
Egypt is Down to $10 Billion in Reserves, says New York Times
January 25th, 2012
By David Goldman
Thank you for teaching me about Egypt’s dire finanical situation. That was not even on my radar. Great, another primed Keg of explosives set to blow in the Middle East.
I guess I have some studying to do regarding Egypt’s financial situation. Thanks again for the lead.
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