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"If Britain were Greece..."
Comments
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Nup, some ruling by some opaque organisation that it isn't a default doesn't mean it isn't. We all know thw truth. It is a default, plain and simple.
I think that 'opaque' organisation is the one that decides if the insurance pays up :eek: so not entirely non consequential'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I think that 'opaque' organisation is the one that decides if the insurance pays up :eek: so not entirely non consequentialThe latest deal to cut Greece's debt has not yet constituted a default, an official trading body has ruled.
The International Swaps and Derivatives Association (ISDA) said that new Greek legislation forcing all bondholders to accept losses and steps by the European Central Bank to avoid losses on its Greek bonds, did not equate to a 'credit event'.
It means payments of credit default swaps (CDS (SNP: ^CDSY - news) ) - insurance mechanisms against default - totalling about 3.2bn euros (£2.7bn) have not been triggered.
Sky's economics editor Ed Conway said the reason for the decision was purely down to the fact that private bond-holders are yet to actually suffer their losses.
He gave this analysis: "It (Greece) is by almost every other standard in default.
"The question I think is one of timing. ISDA cannot declare that a 'credit event' has happened until it's actually happened."
ISDA, which oversees complex forms of credit-related trading, was asked by an anonymous market participant to determine if a Greek 'sovereign credit event' had occurred earlier in the week.
A second question relating to Greece's solvency was asked on Thursday morning, stepping up the pressure on ISDA's EMEA Determinations committee which made the ruling.
In response to both questions, the 15 members voted unanimously that a "restructuring credit event" had not happened.
ISDA was asked if the existence of the revision to Greek law which allows for CAC's - collective activation clauses - means it is a credit event. The answer has to be no because its rules deal with the use of such clauses, not their existence.
Now if they are used. which they will as 100% of the bondholder will not agree, then ISDA will have a real decision with wide ranging consequences to make. Their decision has to be yes because their rules clearly class the use of such clauses as a credit event thus triggering the CDS.
A no means their protocols mean nothing and the CDS has no value. It kills the market the dealer banks themselves invented and destroys a nice revenue stream for them, so am not expecting a no vote myself.0 -
CDS not triggered, dangerous precedent says PIMCO:
http://www.reuters.com/article/2012/03/01/us-greece-bonds-pimco-idUSTRE8201D920120301
Better article just up on FT, but can't link to at moment.Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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One day all derivatives will fail is something Ive heard more then once. Extinguishing trillions like that sounds pretty deflationary to me, I thought inflation was the master plan
All those Greek CDS were of no use, making the banks who sold them as insurance richer and those who bought poorer0 -
vivatifosi wrote: »Honestly Roch, I don't see it like that. What the original article does is say what would happen if Britain was Greece.
Yes, and perhaps the Moon is made of Cheese......0 -
Rochdale_Pioneers wrote: »Yes, and perhaps the Moon is made of Cheese......
Only if you're wearing Magic Fantasy Inducing Labour (C) Sunglasses (TM).
I see you still don't have an answer as to what actually caused the recession.
Nice going Rochdale.0 -
reallity check though.
90% of its economy is black market.
90% of the population dont pay tax.
Outside the citys you dont see house`s with roofs because you dont pay counci tax till the building is complete.
lets not pretent this is a developed nation they arent and wont be in the near term.
Most os europe isnt developed with tax systems etc and thats why they are in this mess no one except the Germans / french deserved a A credit rating ever.If it doesnt pay rent sell it.
Mortgage - £2,000
Updated - November 20120 -
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ISDA was asked if the existence of the revision to Greek law which allows for CAC's - collective activation clauses - means it is a credit event. The answer has to be no because its rules deal with the use of such clauses, not their existence.
Now if they are used. which they will as 100% of the bondholder will not agree, then ISDA will have a real decision with wide ranging consequences to make. Their decision has to be yes because their rules clearly class the use of such clauses as a credit event thus triggering the CDS.
A no means their protocols mean nothing and the CDS has no value. It kills the market the dealer banks themselves invented and destroys a nice revenue stream for them, so am not expecting a no vote myself.
Indeed. If just one single creditor declines to agree to this "voluntary" restructuring, then fails to receive an interest or principal payment in accordance with the original terms of the bond they hold, then Greece is in default. There will be no amount of semantic gymnastics that can nullify this fact. It hasn't happened yet, but when it does the insurers have to pay out on the CDSs, there will simply be no justification not to. If they decline then it's bound to end up in a huge mess of lawsuits, not to mention the knock-on effects on the whole CDS market and the implications for bank solvency everywhere.0 -
There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0
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