The ISDA ruled there was no Greek default. Therefore, the owners of Greek CDS should fuck themselves. My only question to the ISDA is this: if there was no Greek default, how come Greece had to default? After all, the fucking bonds are now trading less than 20 cents on the dollar. I know of bankrupt companies whose bonds were worth more. Indeud, I say this with tongue in cheek, for we all know what is going on here. The ECB is trying to avoid a “credit event” because they are the ones on the hook, since they have expanded their balance sheet by 40% in recent months, bailing out their banks.
Should CDS contracts be honored, payments to insurance owners would literally come out of the ECB treasure chest.
Since we have established that CDS contracts for governments and large banks are worthless, how does a bond buyer insure against future losses?
ANSWER: he doesn’t.
My guess, once the ECB quits playing with itself, via buying sovereign bonds, they will find a thin market for their wares. Why would I buy Italian 2 yr at 1.9% when I could buy some corporate shit and hedge it with CDS? If I buy CAT debt and CAT goes bankrupt, the government isn’t gonna give a shit. Hence, CDS contracts will be honored and I will look like the financial genius that I am.
Think about this: how glum and depressed is the guy who saw this whole Greek shit coming and tried to profit from his research through buying Greek CDS? Ha! That guy is fucked on a spindle.
Anyway, the futures are bouncing higher and auto sales are coming in much better than expected. Fucking Chrysler reported a 40% jump-WOW! We will likely sustain 1 million car sales for February, matching last month, putting us on pace for 14 million cars sold in 2012. That’s a big deal.
BID is trading down on soft earnings. I was waiting for a pullback. My hunch, let it come in another day or two, then start to accumulate. There is going to be some headline auctions this spring that should buoy the shares.
The big story for today and the near term future, however, is precious metals. Last night gold was up 1.5%. Now it’s barely up. Should the run on gold and silver continue, look for a blanket sell off in commodities.
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The Fly is NOT god.
You are but I just wanted to start this post with something different then the annoying fucks who post that same dopey comment.
Well said Fly. There will be ramifications of the CDS but I suppose it will take awhile to play out.
NEWSFLASH: There is no God.
prove it
nice one.
How about the Fly is godlike????
Nope. Doesn’t have a ring to it. Weren’t you here in 2007?
The Fly is God.
Speaking of God,
Dogs praying here
http://www.dogwork.com/prybrme8/
losses are for the 99%
So in other words people are going to sell out of the 700billion dollar CDS market and the trillions of dollars in bonds and have nowhere to fucking put the cash?
Congratulations fuckers, you just triggered $200 oil, $5000 Nasdaq $25000 Dow, $4000 gold, even lower bond yields in the US temporarily and then even higher stock when it finally comes out, and then a collapse of westrn civilization.
Maybe they can stretch it out until the 20s and create the roaring 20s and crash of 29 all over again
Weirdo Jay
“So in other words people are going to sell out of the 700billion dollar CDS market and the trillions of dollars in bonds and have nowhere to fucking put the cash?
“Congratulations fuckers, you just triggered $200 oil, $5000 Nasdaq $25000 Dow, $4000 gold, even lower bond yields in the US.. ”
Precisely. And to think that some fools thought it might be difficult for governments to cause world stock markets to rise, despite Euro Aone defaults, LOL.
Not that big a deal. Some speculators get burned for betting on default. Life goes on.
And the market goes on up.
Governments see no reason to punish crimes that make their stock markets go up, LOL.
Enjoying DLPH winship.
Chrysler sales up 40%. Halftime in America. USA leading by three touchdowns. More to come in the second half.
CDS are a fucked up concept anyways. Talk to the honeybadger.
Winter storms are costly. We didn’t have much this year. The economy likes that.
If this economy is really picking up like the numbers are indicating, Obama gets a second term…
That is, if they can keep gas prices under $5 by the election.
For the first time since 1949, in 2011 the USA was a NET EXPORTER of gasoline, heating oil and diesel fuel.
Hey Obama! Stop causing this GLUT of oil and gas in the USA!
And Hey Big Oil! Stop this gasoline exporting, which is causing abnormally high gasoline prices instead of the $3 gasoline SHOULD be!
Educate yourself before espousing ridiculous, interventionist, economically crushing ideas like this please.
Dude is just agreeing with Bill O’Reilly.
The ISDA is befuddled by “new math”, and tricked by EU legislators. Frankly, how could getting anything other than what you contracted for be considered anything but a “default”? Someone post a boiler plate CDS, so we can all have something to read tonight!
Upholding the rules of a contract? Nah, markets would never go for that. People want to think that if push comes to shove, the powers that be will take the easy way out, change the rules and kick the can down the road. No one actually wants to have confidence that the system will continue to work the way we’ve been told it will work.
Some contracts are voidable.
are investors going to stand for it though? some people holding these bonds and CDSs will obviously be quite pissed off, and some are big and rich enough to have some clout. can they get the ECB to back down through threats, lawsuits, whatever? if all that fails, then you’re right, nobody will want to play withg them anymore. great post, thanks.
Other than natural gas, I am not seeing any sell off in commodities but I do see TZA and VXX not doing very well today.
I know that when I am short the market I look for the negatives to reinforce my beliefs and visa versa for when I am long. Is it possible that you could be wrong about an imminent pullback.
of course.
http://www.isda.org/dc/docs/EMEA_Determinations_Committee_Decision_01032012Q1.pdf
Looks like silver stocks were a bargain at their lows yesterday.
“Legal Crime”………….Breitbart RIP
I’m ditching the Crapstone. Too much overhang with this new offering. imo
Dr Fly, thanks for spreding the good news, Now to Him who is able to do exceedingly abundantly like {Dr. fly }above all that we ask or think, according to the power that works in us, Great article !!
So it is Dr. that faith cometh by hearing, and hearing by the word of God.
dR. fLY ,God can do more than it is possible for us to even imagine.
Second, He will do in our lives, is dependent on the power at work within us.
What is that power? It is the power of His Word, activated by the Holy Spirit.