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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: pogohere who wrote (82122)	10/25/2011 6:34:00 PM
From: pogohere	Respond to of 218535

Europe Struggles for Crisis Remedy Two Summits The 14th crisis summit in 21 months starts with a meeting of all 27 European Union leaders at 6 p.m. tomorrow. The real business gets under way at 7:15 p.m. when chiefs of the 10 non- euro nations depart, leaving the rest to hash out a strategy that they already say requires more work. The cancellation of a finance ministers’ meeting to precede the summit underscored the holes in the plan. The finance chiefs will now meet at an as-yet undetermined time after the summit to work out the technical details of its main elements, including safeguarding banks and writing down Greek debt, an EU official said. (emphasis added) bloomberg.com Risky Business: Merkel Gambles on Parliamentary Support for Euro Backstop Complex Leveraging Plan Parliamentarians have complained that they don't have enough time to study the highly complex plans discussed by EU leaders at their first crisis summit on Sunday to boost the EFSF through leverage. Documents outlining the plan arrived in Berlin from Brussels on Monday evening, in English, and will be discussed by lawmakers at meetings on Tuesday. spiegel.de So if you are a member of the German Bundestag and you understand that the "technical details of [the plan's] main elements, including safeguarding banks and writing down Greek debt. . ." will not be worked out until after the summit on Wednesday night, would you vote for it? Keep in mind that the ruling coalition in Germany has lost every election this year because in most instances the voters were unhappy with the idea of continuing to subsidize Greece at Germany's expense. The irony here is that German banks have been playing China to the Mediterranean states by financing the import of German goods to them, i.e., extending credit to them, just as China has been financing US imports from China.

To: pogohere who wrote (82122)	10/28/2011 3:57:00 PM
From: pogohere	Read Replies (2) \| Respond to of 218535

Fitch: 50% Greek Bond Haircut May Equal Default European leaders’ agreement on a 50 percent haircut on Greek bonds may create an event of default if investors accept it, Fitch Ratings said in a statement today. “The 50 percent nominal haircut on the proposed bond exchange would be viewed by the agency as a default event under its Distressed Debt Exchange criteria,” the statement said. While the accord is “a necessary step to put the Greek sovereign’s public finances on a more sustainable footing,” Greece will face “significant challenges” including ratios of government debt to gross domestic product at “well over 100 percent even in a positive scenario.” European officials concluded their 14th crisis summit in 21 months early yesterday in Brussels with an agreement that persuades investors in Greek government bonds to write down half their holdings. Fitch said today that more details are needed on the accord, which includes an increase in the region’s rescue fund to 1 trillion euros ($1.4 trillion). “It’s highly likely that all three rating agencies will classify this restructuring as a technical default,” said Padhraic Garvey, head of developed debt-market strategy at ING Groep NV in Amsterdam. “Even if it’s voluntary, investors are left with a product that’s lower in value to what they originally agreed.” . . . The International Swaps and Derivatives Association, whose market decisions are binding, hasn’t said whether the $3.7 billion of credit-default swaps linked to Greek government bonds should pay out, though it has indicated the decision hinges on whether investors accept losses voluntarily. A credit event can be caused by a reduction in principal or interest, postponement or deferral of payments or a change in the ranking or currency of obligations, according to the New York-based trade group’s rules. ING’S Garvey said Fitch’s announcement probably won’t trigger insurance contracts linked to the debt. “The indications are that ISDA won’t class it as a credit event,” he said. bloomberg.com My understanding is that such swaps are contracts crafted individually by the parties to them who can vary the terms to suit their requirements. Therefore some of these contracts may indicate that a rating agency determination of default triggers the requirement of a payout to the covered party.