Most agree 60% is the target number. However, the banks say 40. They are trying to avoid triggering CDS.
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y u no take 60%
So this means I should buy fas, right? lol
Basic question, but when will a CDS trigger? Does it have to be a 100% default on a certain obligation, or can it be triggered before?
The world hasn’t really experienced this since CDS became popular. So, if they can successfully negotiate a hair cut without triggering CDS how many institutions are going to start dumping their bond exposure to Portugal, Ireland, Spain, Italy etc, knowing their CDS aren’t any good? I suppose they probably already know, but just a thought.
Screwing over the people who properly hedged in order to save the sacred bond holders.