http://ftalphaville.ft.com/blog/2010/01/29/137341/whos-selling-greek-cds/
The News On Greece has been out for some time now. We all know what a mess this countries finances are in. But why must France be front and center in every mess?
It would be funny though if Greek Banks were in fact selling CDS Insurance on Greek Debt. What's not funny is that Sovereign CDS bets have overtaken Emerging Market CDS bets all together.
Its just another example of how inter connected the entire financial system has become. How the concentration of risk has made the entire system extremely unstable even today.
The theme here is that Greece is in trouble.
NO! Europe is in trouble.
You make a good point in that Greek Banks are in a win win situation here. If they sell CDS insurance, and they do get bailed out, they have a nice profit on the insurance. If they do default, the banks all go out of business.
ReplyDeleteYou make a good point in that Greek Banks are in a win win situation here. If they sell CDS insurance, and they do get bailed out, they have a nice profit on the insurance. If they do default, the banks all go out of business.
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