ISDA Determines Greek Default


A credit event has occurred.  CDS will pay off, subject to an auction procedure on March 19th.

I’ve seen endless chatter saying that the restructuring was done in a way to avoid paying off the CDS.  I wonder whether all those opinion-slingers will now print apologies.

I won’t be holding my breath.


Just proof once again that it’s more important to keep the casino open than to avoid paying one big winner.

The ISDA FAQ’s on the determination, and other comments, are available here.


2 Responses to ISDA Determines Greek Default

  1. Conscience of a Conservative says:

    The world is waking up to the sham of CDS, only an ISDA committee of sell side banks who I’m speculating were largely buyers and not holders of the contracts would claim Greece was not a default. The huge outrage on the issue and the very real possibility that buyers of CDS would stop entering the derivative casino forced the issue. I did read earlier that CDS contracts which spelled out a debt restructuring as a pay-out term were already set to pay-out, although that was also 11th hour I believe.
    The Greek CDS fiasco to me is more of the same we saw with MF Global where clients learned that they were junior to counter-parties of MF Global parent and that the laws on the books such as Sarbanes Oxley are not relevant. And now the CFO is set to get a court awarded bonus.

  2. Tom Drake says:


    Thanks for consistently pointing out ignorant opinions, some of them mine (lol), which get wide distribution in this age of basement or closet blogs in seemingly every residence.

    We have witnessed so much BS about the past four years from all sides. It’s good to have a few sceptics like you.


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