The market is once again up today because the EU has somewhat agreed for a package for Greece. This whole thing is just going to flop and they are just stalling time. Why can’t they just take the default now and let the market slide instead of dragging it on.
Because volatility is a trader’s best friend and there is a massive transfer of wealth occuring right now.
whystudy Wrote: ------------------------------------------------------- > The market is once again up today because the EU > has somewhat agreed for a package for Greece. > This whole thing is just going to flop and they > are just stalling time. Why can’t they just take > the default now and let the market slide instead > of dragging it on. Because the European banking system is currently on life support and a Greek default would be the equivalent of pulling the plug
Because they need to organize a calm and orderly default. This would be difficult, since once even rumors of a default option start circulating, creditors are likely to panic and exacerbate the market turmoil
^ correct. Best thing to do now is to orchestrate a nice soft landing. Greece is near certain to default. If the banks holding Greek debt can be stabilized, contagion can be contained.
I love how markets have rallied 7%+ despite a Fortune Global 50 company being halt traded until after the weekend and is being nationalized as we speak. Do we really trust that the French and Belgian governments can agree on terms and split up one of the world’s largest companies over the weekend without any fallout? I’m confused why the Dexia debacle isn’t getting more press, other than ZH (which I tend to hate), especially with regards to counterparty risk… note: Dexia went through this before, on Sept. 29, 2008. I can’t help but think that history will rhyme.
ohai Wrote: ------------------------------------------------------- > Because they need to organize a calm and orderly > default. This would be difficult, since once even > rumors of a default option start circulating, > creditors are likely to panic and exacerbate the > market turmoil There is no such thing as an “orderly default” for Greece, because all it does is set precedent for Spain and Italy to come calling in a few years, or sooner, and there isn’t a snowball’s chance in hell that anyne is going to get Germany to write that check. All an “orderly default” of Greece is is a more fancy way of kicking the can.
MattLikesAnalysis Wrote: ------------------------------------------------------- > I love how markets have rallied 7%+ despite a > Fortune Global 50 company being halt traded until > after the weekend and is being nationalized as we > speak. Do we really trust that the French and > Belgian governments can agree on terms and split > up one of the world’s largest companies over the > weekend without any fallout? I’m confused why the > Dexia debacle isn’t getting more press, other than > ZH (which I tend to hate), especially with regards > to counterparty risk… > > note: Dexia went through this before, on Sept. 29, > 2008. I can’t help but think that history will > rhyme. Fortune Global 50? Dexia’s not even in the TOP500. Counterparty becomes France/Belgium, so much lower risk. That’s the whole point, no?
justin88 Wrote: ------------------------------------------------------- > MattLikesAnalysis Wrote: > -------------------------------------------------- > ----- > > I love how markets have rallied 7%+ despite a > > Fortune Global 50 company being halt traded > until > > after the weekend and is being nationalized as > we > > speak. Do we really trust that the French and > > Belgian governments can agree on terms and > split > > up one of the world’s largest companies over > the > > weekend without any fallout? I’m confused why > the > > Dexia debacle isn’t getting more press, other > than > > ZH (which I tend to hate), especially with > regards > > to counterparty risk… > > > > note: Dexia went through this before, on Sept. > 29, > > 2008. I can’t help but think that history will > > rhyme. > > Fortune Global 50? Dexia’s not even in the > TOP500. > > Counterparty becomes France/Belgium, so much lower > risk. That’s the whole point, no? sorry. i think dexia 49 as of 2010 (96 as of 2011, so top 100 for 2011). anyway, the problem is that FRA and BEL don’t want to take all the risk and are responsible for cutting up the pie (i.e. bad bank, good bank). who’s to say they know what’s a risk and what’s not a risk, in four days. do you know how many subsidiaries dexia has?
When someone calls you on something, provide a valid citation in defense. Market cap-wise, I don’t see Dexia above $15B USD in 2010, which is nowhere near the top 100. Maybe you’re talking balance sheet-wise?