muses of the moment

February 28, 2012

ISDA meeting on March 1

Filed under: Global Debt — totallygroovygirlfriday @ 7:25 pm

Click here for post. ISDA will hold first meeting on Greek Debt. Will it be a default or non-default event? These are the people that determine if default insurance pays up or not.

Zerohedge says it will be a “voluntary” cut to debt holders, thus a non-default event. A default by any other name…..

  • Default event means debt contracts sharply.
  • Non-default event means ligation.

Same end-game, only different timeline and different investors get screwed.

Remember, Greece is a blue-print for how the other PIIGS debt will be handled. If bond holders are going to get screwed as their insurance will not cover them in a non-default event, they will start selling European debt.

We will soon see which hedge funds and money market funds have Greek Debt. GG hopes there are no more MF Globals out there.

Everything has consequences. Save the banks for another quarter, but make it impossible for stressed European countries to obtain debt at any price in the open market. The PIIGS will have to go to the IMF for more handouts and trade their sovereignty for the privilege.

Global debt must contract one way or another.

The way of Iceland is a better option for the country’s independence and a quicker resolution and recovery.

1 Comment »

  1. When the ISDA meets this Thurday its members will begin deciding on what to consider the “credit event” that is the Greece sovereign debt default.

    The decision could in fact trigger the CDS swaps that were taken out as insurance by the bond owners to protect them against the event of a bond default.

    So how can the ISDA come to any decision other than that this was a default? We will have to wait and see!

    Another article at The Political Commentator here:

    Comment by hallmark1 — February 28, 2012 @ 10:58 pm

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