[yazetaw]

get your shorts in?

http://www.zerohedge.com/news/isda-f...orts-bloomberg

[ZZtop]

Israel couldn't advance in and Easterly fashion on Purim, so they turned Westerly?

[kmjbbT3U]

Me thinks a mega swindle just took place while everyone was watching all the distractions in the news.
Don't worry though...it was all expected and therefore priced into the ponzi stock market.

[makemoneyonli]

Of course it is a default. The issuers of the credit default swaps will default over it, so they try to say that it wasn't a default. Actually it doesn't matter what they do. If they don't agree that Greece's default was a default, the entire credit default market will collapse, from lack of trust. If they agree to it, it will collapse due to lack of liquidity. Possibly they can prop it up in the case of Greece, but with the following defaults of Ireland, Portugal, Spain, Italy, France, UK, Japan and the US, the CDS market will collapse prior to reaching any of the major countries, and in quick succession the entire derivative market will go POOF...

This is not the end of the beginning... IT IS THE BEGINNING OF THE END!

[Brareevor]

The dominoes continue to fall...

[AnetTeilor]

A "Greek credit event has occurred"? I guess that's one way of putting it.

[makemoneyonli]

A "Greek credit event has occurred"? I guess that's one way of putting it.

Yeah better keep the language ambiguous and vague for this one! Trying to keep the trust and the liquidity. It is like walking on a greased up tightrope between WTC 1&2 on the morning of 9/11/2001, while having a bad hangover...

[Discus]

So...... a rolls royce has a mighty accident in front of a small insurance company. It happens to be the insurance company that holds the policy for this car. It may be a small company, but it is the largest one around for this area. The sound of the accident is so loud that all the local shop owners, who happen to be stock holders in the insurance company, come out to view the horrific wreckage.

The driver of the rolls crawls out through a broken window to see, for the first time, a giant Mack truck partially over parts of the rolls. He struggles to his feet and hobbles toward the insurance building. Inside, the owner of the insurance company completes a conversation with his accountant. "So, what you are saying," reiterates the owner, "is that we are essentially broke and can afford no losses."

The accountant nods. "But it is worse than that. We have such extreme exposure to risk that we are in jeopardy of impossible recovery."

The door swings open to reveal a bloody man wearing a torn suit. "Come out here," the shaken man calls to the insurance company owner. "Look," he says, pointing at the wreck.

"Ooooo, that looks bad. We should call you an ambulance," the owner tells the royce driver.

"Yes, but you are my insurance company and I want you on this case right away," the driver directs.

"What? We are the insurer? Why, that does not look so bad. In fact, I think it is just a minor dent here and there. No need to file a claim for that!"

"What?" screams the driver. "And my neck and back are starting to hurt bad. Did you call an ambulance yet?"

"Oh my dear sir. You don't need an ambulance. You look just fine. A hot tub and you will be feeling fine in a few hours. Let's just say that this was all a little detour today."

"What?" asks the driver. "This horrible accident?"

"I don't see any accident," the insurance mogul states sincerely. "I see a negotiated interruption of intended paths."

[duncanalisstmp]

We'll know the importance of this 'credit event' by watching the price of gold and silver. Or is that no longer a good indicator of faith in fiat? Because of how the prices of gold and silver are manipulated?


Hatha

[sigrekatonov]

There was an excellent synopsis of the current state of affairs in the comments of this article:
http://www.ft.com/intl/cms/s/0/7e385...#axzz1ogueDFvs

However, I accidentally refreshed the page and can't access the article any longer without getting a membership. Could someone post the comment here?

[makemoneyonli]

I couldn't get to the article vacuum...

ISDA said that the current +100 Billion Euro loss of bondholders has triggered $3 Billion of CDS payments. That is utter bullshit! I would wager that the Swaps would warrant a payout of at least the nominal amount iow $135 Billion, probably way more the way the derivative market has developed in general. Even a trillion dollars is a real possibility. Most of these CDS's were issued not to the legitimate bond investors insuring their investments, but to casino bankers who were betting on a Greek default. Similar to a neighbor taking out a fire insurance 10 times the value of your house while stocking up on barrels of gas at the fence of your property. This will get fugly!

[makemoneyonli]

Wolf Richter** www.testosteronepit.com

“We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos about the bond swap that had just whacked private sector investors with a 72% loss. While everyone other than the bondholders was applauding, the drumbeat of Greece’s economic horror show continued in its relentless manner.

In central Athens, a stunning 29.6% of the businesses ceased operations, up from 24.4% in August; in Piraeus 27.3%, a 10-point jump since March. The whole Attica region lost 25.6% of its businesses. “This worsening of the survival index in the commercial sector ... shows that resistance is waning,” said Vasilis Korkidis, president of the National Confederation of Hellenic Commerce. And fourth quarter GDP was revised down to -7.5% on an annual basis. The Greek economy has shrunk about 20% since 2008.

Unemployment is veering toward disaster: 21% in December, announced Thursday, was horrid enough, but youth unemployment rose to a shocking 51.1%, double the rate before the crisis. A record 1,033,507 people were unemployed, up 41% over prior year. Only 3,899,319 people had jobs—a mere 36.1% of a total population of 10.8 million!

No economy can service a gargantuan mountain of debt when only 36.1% of its people contribute (by comparison, the US employment population ratio is 58.6%, down from 64.7% in 2000). Hence, another bout of red ink. The “cash deficit” at the end of 2011 hit €24.9 billion, 11.5% of GDP, far above the general budget deficit. Government-owned enterprises, such as the public healthcare sector, couldn’t pay their bills. Total owed their suppliers: €5.73 billion.

Yet, forcing down the deficit is one of the many conditions that the bailout Troika of EU, ECB, and IMF have imposed on Greece. And: "If the Greek people or the Greek political elite do not apply all of these conditions, they exclude themselves from the Eurozone," said Luxembourg’s Finance Minister Luc Frieden. All of these conditions. Then he added the crucial words: "The impact on other countries now will be less important than a year ago." Read.... Firewalls In Place, Markets ready: Greece Can Go To Heck.

Under pressure to cut its healthcare budget, the government reduced the prices that the industry can charge state-owned insurers. So wholesalers are selling their limited supply outside Greece, while out-of-money state-owned insurers delay payments to pharmacies and hospitals, which then can’t pay their wholesalers for the medications they do get. Wholesalers turn off the spigot. And the system locks up.

Even Health Minister Andreas Loverdos conceded that there were shortages, but that they were limited to lower-priced medications. Of the 500 most common drugs, 243 have disappeared from the shelves, including antibiotics. The Panhellenic Association of Women with Breast Cancer, for example, received many complaints from patients who claim they weren't treated due to lack of oncology drugs. And the world’s largest pharmaceutical companies are worried that Greece might not be able to pay them at all.

A bright spot: tourism. In 2011, receipts rose by 9.5% over prior year as the Arab Spring scared tourists away from destinations such as Egypt and Tunisia. In October, receipts jumped 15%. Alas, in December they declined 4.9%. And that reversal has now infected 2012. Tourist arrivals so far this year are down 10.7% in Athens and 6.7% for the country. Greece's last growth industry has hit the skids.

With unemployment climbing, production and consumption tanking, businesses shutting down, and tourism nose-diving, there is only one way for tax revenues: down. Budget deficits will be worse than promised. Greece’s debt—now largely to taxpayers of other countries—will continue to balloon. The standard of living of the vast majority of Greeks will get slammed, though the elite that are negotiating these deals will do just fine.

“We still don’t have a solution for Greece, so there will be a harder default to come,” predicted Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies. Yet, in a bitter irony, Germany—the country where tax dodging is a national sport—decided to send 160 employees of its Ministry of Finance to Athens to fix the tax collection system. For that whole debacle that will endear the already reviled Germans even more to the Greeks, and for just how long a tax dodger can abuse the courts, read.... Final Bout of Spastic Greco-Teutonic Wrestling.

[Precturge]

No economy can service a gargantuan mountain of debt when only 36.1% of its people contribute.




Rememer that figure cause numbers like that are coming home to roost

[ZZtop]

Its almost as if the same holds true in currencies as it does in modern sovereign governments.

Divide and conquer.

An element of subversion must be introduced to disturb & "unsettle" any settlements.

Same holds true here.

If all of us were so confident in Gold breaking 2000 & Silver 40 they would,

but no these damn deflationistas polluted my thought process

Horn being removed, i am Hornless...

[PymnImmen]

We'll know the importance of this 'credit event' by watching the price of gold and silver. Or is that no longer a good indicator of faith in fiat? Because of how the prices of gold and silver are manipulated?


Hatha

The importance will be reflected in the US Dollar, until it's the US dollar's turn to sour, which is several sovereign states away.

Gold and silver haven't really reacted to "world events" during this entire 12-year bull run. Rather, it's been a steady rise based on broad structural fundamentals.

[Discus]

The first sign will be the skyrocketing stock market. The need to buy appreciating and income producing assets will be seen as more valuable than gold. The image of gold is a metal of stagnancy. In a fast-paced money grabbing world, the image of a growing stock market in a stable (politically & economic) environment is the first attraction. It will take on a surreal climb as dollars flood into the market from all corners of the world. Reality will hit home at some point and even the stock market will become stale since it is denominated in dollars. Zimbabwe dollars and Zimbabwe stock market.... then stagnant old gold will look like a safe harbor.... but by then it will already be close to $3,000.

[yazetaw]

http://av.r.ftdata.co.uk/files/2012/...FAQs-03-09.pdf

[Riprincattiva]

No economy can service a gargantuan mountain of debt when only 36.1% of its people contribute.




Rememer that figure cause numbers like that are coming home to roost

The reportable economy is shrinking; but the underground economy will continue to grow and displace the former. I will give the Greeks the benefit of the doubt that thay know the debt situation with the banksters of Europe is not only hopeless, but pointless, and most certainly fatal to their sovereignty and way of life. More and more Greeks, public and private, will unplug from the matrix and conduct business underground. They will watch in wonder as the ECB and it's bloodsucking minion banks offer one refinancing after another, anything to avoid outright default. The finance side of the situation is already a farce on it's way to a dark comedy. Greek membership in the EURO is dead - but the ECB and Brussels insist that the corpse is moving and will reanimate given more debt. Gold watchs this pathetic spectacle and gains the luster of security and permanence with each passing day. In time, even the most dim witted will find gold's safety and refuge irresistable. The banksters are building an infinite tower of debt, like a latter day Nimrod, thinking that they can outlast gold. Long after their debt tower crumbles to dust, gold will remain, unchanged and undiminished, to form the foundation of a new monetary order for the world.

[Anykeylo]

From a Bix Weir email:

As we absorb all the "happy talk" about the Greek bailouts the much more important issue lies in waiting...the determination on Credit Default Swaps by the ISDA.

On Greece, Defaults, And The Future Of Derivatives

http://www.forbes.com/sites/afonteve...f-derivatives/

Will the ISDA declare a default as of Monday when the bonds are swapped? That's the big question but the ANSWER will be irrelevant.

The "derivative goose" is cooked!

Here's why:

If they declare a default then the payoff will be enormous for those who sold those derivatives (ie big banks and insurance companies). The Forbes article says it's only $3.2B in play but that is the biggest crock of BS ever uttered! Germany alone bought $7B in CDS's to cover their $8B in Greek bonds! And that's just ONE player in the gigantic Ponzi Scheme invented by our own Blythe Masters!

And most of these banks who sold CDS's would buy CDS's to cover their asses. Round and round she goes! But the biggest problem is that EVERYONE MUST PERFORM! It's called COUNTER-PARTY RISK!

Just read this article in the WSJ explaining how the German Banks have NO RISK from the Greek CDS Market...

German Banks: Small Impact Seen From Greek Credit Event, CDS Trigger

http://online.wsj.com/article/BT-CO-...09-710761.html

What's that saying..."a chain is only as strong as it's weakest link"?!

Many people are saying there is no way the ISDA will declare a default because they are a committee of Banksters.

Ok...then what?

If no default is called you can kiss the entire CDS market goodbye on Monday too! It will have proven to be not a viable way to hedge credit risk and every CDS holder in the world will dump their CDS's. That would instantly change every reported position that used CDS's to hedge risk. Companies around the world would have to report their REAL EXPOSURE and not their NET EXPOSURE.

It truly is a "Damned if you do - Damned if you don't" scenario.

Ultimately, I think the ISDA will declare that Greece defaulted and let the chips fall where they may.

Less liability on their part for running the shell game.

*PS - The ISDA has been in their meeting over 5 hours now and may be waiting for the US Markets to close for the weekend before breaking the news.

Back to the bunker for me!

May the Road you choose be the Right Road.

Bix Weir

www.RoadtoRoota.com