The Countdown Begins and the Markets Are Ready to Exhale

http://www.minyanville.com/businessmarkets/articles/todd-harrison-greece-economy-global-default/3/11/2010/id/27239

Because WHY?


Ironically--or perhaps coincidentally--the next story I read on Bloomberg offered that the crackdown of naked swaps in Europe will ring hollow without stateside sponsorship. European regulators could initiate a continent-wide ban on speculative trading of sovereign Credit Default Swaps tomorrow but it won't work without American participation in the plan.



My understanding of the EU, is that it's prime directive laws superseed those of the country. If this is an EU backed santion, then the UK is forced to comply, no matter what the UK bank wants to do.
What it will come down to is a power trip.
Is the EU a joke?
Or do the banks take a fall?
Either way SOMEONE is going down!

“Speaking as an ex-lawyer: Greece can "declare" whatever it wants but no one will care. If a fund in London buys a CDS from a bank in New York, and the CDS contract specifies it is governed by UK or New York or Delaware law–they would be insane to specify Greek law -- the Greek government has as much power to nullify the CDS as it does to nullify gravity.”

Karl has my drift I see.
This is going to get verrrrry interesting I think

Is that fear I sense
http://market-ticker.denninger.net/archives/2067-Is-That-Fear-I-Sense-CDS-Regulation.html

Bombshell in AIG 10Q

http://market-ticker.denninger.net/a...al-Relief.html

Oh so AIG does admit, that it knew they were writing credit default swaps
for the explicit purpose of getting around capital requirements - either by banking regulators or (possibly worse) EU sovereign regulations.
Sniff, sniff is that admitted fraud I smell?


A total of $150.0 billion in net notional amount of the super senior credit default swap (CDS) portfolio of AIGFP as of December 31, 2009, represented derivatives written for financial institutions, principally in Europe, which AIG understands to have been originally written primarily for the purpose of providing regulatory capital relief rather than for arbitrage purposes. The net fair value of the net derivative asset for these CDS transactions was $116 million at December 31, 2009.

So AIG "understands" that $150 billion of credit-default swaps were written by AIGFP to European Institutions (no note by the way as to exactly what's in there - or who owns them) for the explicit purpose of getting around capital requirements - either by banking regulators or (possibly worse) EU sovereign regulations.

When did they come to "understand" this? Did they write these swaps originally knowing that their essential purpose was to evade capital requirements, or was this a "recent" revelation of some sort?

Indeed, the section goes on to say