Will the Greece Default bankcrupt Wall Street?

Comments well come!

I have been following the Greek economic status. I thought they might default by January and even took a bet with a mate and lost. Damn!

Now it seems to be Ok dokay. Question is how long will it last. The Policy makers and the government have been divided. People are divided. My experience with Greek people made me believe that they are not paying their taxes properly. Not verified with facts.

Recent articles suggests that, with some facts, by March they will default. Do you think I can take a bet go "double or quits" with my friend. I found this in an article in Yorkshire Post

Speaking to the Yorkshire Post during a visit to Leeds, Dr Stelzer said: “It’s only a matter of time before they (Greece) go bankrupt. They are bankrupt now, it’s only a question of how you recognise it and what you call it.

“Certainly they will default...maybe as early as March. If I were them I’d get out (of the euro). They would be in better shape if they had their own currency.”

He added: “If they (Greece) leave the euro, the euro would probably strengthen because it wouldn’t have this drag any more.”

And further in my reading I came across this term "Derivatives", and found out that the bet I took with my friend can be taken as a derivative. I am a financier ha ha.

So one asks what the heck this got to do with Greece huh? In a bit.

Now read this from:

According to the Comptroller of the Currency, nearly 95% of the banking industry’s total exposure to derivatives contracts is held by the nation’s five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the “insurer” actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down.

I, mistyfied about all this wanted to find out more, and found an organisation called the International swaps and Derivatives Association (ISDA), which has as it's members major banks and hedge funds including above mentioned US banks. So one of the duties of this organisation is to determine whether a 'certain event' is actually a default. If a 'credit event' is at a default the CDS's come into play. So the very same banks who decide this are the same banks who own them. Bloody nice way to do one's business.

Now the interesting bit. There was a bank called MF Global who lent money to Greece and took CDS's with major banks in US. So when the ISDA declared that Greece is not at a default and made to take a 'hair cut' of 50 % , MF Global could not play the CDS's and went bankcrupt. So the very same banks who insure the lender, and take premiums, decide whether to pay or not. Greece went down with 50%, and ISDA decided it is not a default. What percentage makes it a default? No one can tell us. Hope Greece defauls and bring these blood suckers down!

article: and article helped me to reserch this. THere may be errors. If you find them please do comment.