Couple of interesting stories about Greece and the constant charade and the continual coverup of fiscal reality. First there was this one:
UPDATE: Journalist Stands By Story That ISDA Has Declared A Greek Bond Credit Event
Simone Foxman|Mar. 9, 2012, 1:55 PM
Derivatives Intelligence (part of Institutional Investor) reportsthat the International Swaps and Derivatives Association has determined that Greece has triggered a credit event as part of its debt restructuring.
This would provoke credit default swaps—insurance contracts on Greek bonds issued under Greek law—to be paid out.
But we don’t know why they have this and nobody else does, and we can’t confirm. Therefore, we have certain misgivings about the veracity of this report. While everyone expects that this will be the outcome, the report is not currently out.
ISDA’s committee met today to discuss the issue, and said it would issue a statement on whether or not a credit event had occurred once Greece formally activated the collective action clauses it recently inserted into its Greek debt issuances.
Consensus is that activating the CACs will indeed provoke a credit event, however analysts have been waiting all day for a decision to be published here, to no avail (yet).
Now why on earth would this journalist have to “stand by his story”? Because a lot of people don’t want other people to know the reality about the situation resulting in Greece living off of borrowed money.
The next obvious question is “what is a credit event”?
From Wikipedia: A credit event is the financial term used to describe either: A general default eventrelated to a legal entity’s previously agreed financial obligation. In this case, a legal entity fails to meet its obligation on any significant financial transaction (coupon on a bond it issued or interest rate payment on a swap for example). The marketplace will recognize this as an event related to the legal entity’s credit worthiness. A financial event related to a legal entity which triggers specific protection provided by a credit derivative (credit default swap, credit default swap index, credit default swap index tranche, etc.) The events triggering a credit derivative are defined in a bilateral swap confirmation which is a transactional document that typically refers to an ISDA master agreement previously executed between the two swap counterparties. There are several standard credit events which are typically referred to in credit derivative transactions: Bankruptcy Failure to Pay Restructuring Repudiation Moratorium Obligation Acceleration Obligation Default
So now Reuters is reporting:
ISDA declares Greek credit event, CDS payments triggered
By Daniel Bases
NEW YORK | Fri Mar 9, 2012 3:39pm EST
NEW YORK (Reuters) – 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.
The decision by the EMEA Determinations Committee to declare a so-called credit event was unanimous, ISDA said in a statement.
Markets showed little reaction to the widely expected decision. The euro edged lower against the U.S. dollar while U.S. Treasury prices saw losses pared after the ISDA announcement.
The ISDA said the use of “collective action clauses (CACs) to amend the terms of Greek law governed bonds issued by The Hellenic Republic such that the right of all holders of the Affected Bonds to receive payments has been reduced.”
The “credit event” ruling means a maximum of $3.16 billion of net outstanding Greek credit default swap contracts could be paid out, though the actual amount is likely to be lower because bondholders are not losing all of their original investment.
ISDA said the auction will be held to determining the actual payout amounts on March 19.
Greece said it would use the newly passed legislation that included the CACs to force private creditors into a bond swap.
This follows creditors’ voluntary tendering of 85.8 percent of the 177 billion euros ($232.22 billion) in bonds regulated by Greek law. The use of CACs should boost participation to an estimated 95.7 percent.
Now if you’re one of the fools who believe the economy is picking up and everything is going to be just wonderful going forward, BUY GREEK DEBT and put your fool money where your fool mouth is.
We have been hearing a load of lies on Greece and its catastrophic plunge into socialism – which Obama is replicating in America as we speak – for over a year now. We get terrible news, then we get a ton of whitewash and a meaningless “agreement” of some kind and a bunch of lies about what the “agreement” means. And that is followed by such a crisis that there’s another report with terrible news, followed by yet another ton of whitewash and another meaningless “agreement” and another bunch of lies about what that “agreement” means. And so on and so on. And maybe lemmings aren’t crazy enough to follow each other off a cliff and then plunge to their deaths, but humans sure as hell are.
Greece is going down in flames.
The only meaningful question is whether the next country to follow in Greece’s Dodo bird footsteps will be Spain, or Portugal, or Cyprus, or Hungary, or Belarus, or Ireland … or America.
One thing is certain: our time is coming. And when it comes you’ll wish it was a ton of bricks falling on your head instead.
Vote for Obama. Vote for a complete financial and economic collapse followed by a period of sheer human suffering beyond anything that the United States of America has even dreamed of.
The beast is coming.