If the Assn declares NO DEFAULT, those who attempted to insure their positions will be exposed.
what I got is this: If ISDA declares that an xx% haircut is NOT a default, the 5 US Banks that issued the CDS's to debt holders will skip away from THIS haircut scott free FOR NOW. Meanwhile the brokerages and others that have bought the GREEK Sovereign Debt and hedged their downside risk to create a lo-risk trade will now be exposed to bankruptcy and ruin for they will have NO insurance and no recourse. TRANSLATED = lotsa people gonna go belly up when / if ISDA declares NO DEFAULT. Bank issuers of CDS on this deal, will have dodged the bullet and cheated death this time.
Remember when MF GLOBAL flamed out, like a month before the markets cratered, as selling commenced.....hmm
Jim said this NO DEFAULT POSITION would be Bad for the Dollar, Good for Equities and Good for Gold, and I would add, once it runs its course of bankrupting a whole bunch of people BECAUSE, that admission of a HAIRCUT will mean destruction of liquidity and debt based money, and to that extent and MORE some form of QE will be used to replace that and patch the obvious holes in this ships hull. So what I'd possibly see is another Crater leading up to a fallout like Early October, and once the bankruptcy silliness is over, then a huge rally like from Oct to NOW.