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Old Sep 16th, 2011, 08:03 AM   #97
trader967
 
 
Join Date: Sep 2011
Posts: 4
Kaminsky on Strategy Session yesterday said he heard that Greece may default this weekend. Maybe it's finally time. But I have been wondering about the meeting occuring in Poland. In January 2011 Poland and Czech Republic were anxious to join the EU but decided to bide their time, waiting for the zloty/euro situation to improve (according to Bloomberg Businessweek at least). PLN EUR chart looks good to me.
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Old Sep 16th, 2011, 09:39 AM   #98
Martinghoul
 
 
Join Date: Jan 2009
Location: London
Posts: 6,310
Quote:
Quote from benwm:
I think trefoil's assessment is accurate. If Greece pulls out, the Euro will quite possibly rally, and vice versa if it is Germany that decides to pull out. But the Euro is likely to survive in some form or other.

There is still a way out of this mess, but I don't feel that Merkel/Sarkozy are the ones to steer us through it. Maybe when these two clowns have moved on then there will be some feasible solutions put on the table.

What is your central scenario?
That they ultimately integrate... With or without Greece, but Greece is a special case. I think it's important to recall that the US has gone through this and managed to make it. Obviously, there are some differences, but still.
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Old Sep 16th, 2011, 12:17 PM   #99
trefoil
 
 
Join Date: Mar 2007
Posts: 3,523
Quote:
Quote from Martinghoul:

That they ultimately integrate... With or without Greece, but Greece is a special case. I think it's important to recall that the US has gone through this and managed to make it. Obviously, there are some differences, but still.
I'd say Portugal as well, should they succeed in holding this together semi-permanently. They've been suffering under the euro for a real long time, and most of their exports go to Spain. They could use a devaluation badly.
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Old Sep 16th, 2011, 08:24 PM   #100
Happy Hopping
 
 
Join Date: Oct 2006
Posts: 254
Quote:
Quote from jrkob:

No, it means that you need to pay 36% per annum of the notional you want to "insure", and this is for a maturity of 5y (Bloomberg doesn't know yet how to deal with upfront+running but can't blame them as market participants change the way they quote all the time).

In the real world, no one will agree for you to pay on a running basis only. At the moment (as in today), if you want to insure 5y Greek debt, you will need to pay 58% of your notional upfront, and 5% per annum.
1) IN that case, does any1 has a link as to the actual figure of the cost of these CDS to insure Greece for 5 yr.?

2) Also, the CDS is to insure Greece of a default, pay out $50M. But what if it's a partial (structure) default? Does the institution who underwrite those CDS, for e.g., Goldman Sach, still have to honor the CDS if it's a partial default? What's in the fine print?
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Old Sep 17th, 2011, 05:57 AM   #101
Martinghoul
 
 
Join Date: Jan 2009
Location: London
Posts: 6,310
What's a "partial default"? In general, there's a set of events that are supposed to legally trigger CDS. Restructuring, re-denomination, missed coupon, etc... However, ultimately the decision falls to ISDA/committee of mkt participants and, finally, courts. That's what makes sov CDS into such a sh1tty scam product.
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Old Sep 17th, 2011, 11:34 AM   #102
jo0477
 
 
Join Date: Aug 2010
Location: Vancouver, Canada
Posts: 229
Quote:
Quote from Happy Hopping:

1) IN that case, does any1 has a link as to the actual figure of the cost of these CDS to insure Greece for 5 yr.?

2) Also, the CDS is to insure Greece of a default, pay out $50M. But what if it's a partial (structure) default? Does the institution who underwrite those CDS, for e.g., Goldman Sach, still have to honor the CDS if it's a partial default? What's in the fine print?
Here's a link for sovereign CDS rates

http://www.cnbc.com/id/38451750
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