Tuesday, July 5, 2011

Greece slip sliding away

Director Blue offers the latest lousy news from Europe.
When Greece inevitably defaults, the impact will, in my opinion, be severe. Its credit default swaps (basically, bets that Greece will fail to pay its debts, abbreviated as "CDS") will suddenly explode in value. The issuers of said CDS contracts must find ways to pay those bets off. Think of AIG, only with pissed-off Arab Sheikhs, Russian mobsters, African ganglords and Mel Gibson in Road Warrior. And who is exposed to such a default? Fact is, no one really knows.
Hope you get a good night's sleep after seeing that.

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