Greek Credit Swaps Signal 91% Chance of Default

[xchrom]

http://www.bloomberg.com/news/2011-09-08/greek-credit-swaps-surge-to-record-signal-91-chance-nation-will-default.html

Credit-default swaps on Greek government debt surged to a record, signaling there’s a 91 percent probability the nation won’t meet debt commitments, after its economy shrank more than previously reported.

Five-year contracts on the country’s sovereign bonds jumped 240 basis points to a record 3,045 basis points, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

Gross domestic product shrank 7.3 percent from a year earlier after declining 8.1 percent on an annual basis in the first quarter, the Hellenic Statistical Authority said. Greece’s financial situation is “on a knife’s edge,” German Finance Minister Wolfgang Schaeuble told lawmakers last night, the parliament’s HIB bulletin said.

[Yo_Mama]

1. They would have to strike oil to be able to pay their debt.

And by now, it's obvious that no one else is going to step in and pay it for them.

[MadHound]

2. And if Greece goes, Europe goes, and then the rest of the world, including us

The joys of interconnected economies.

[Turbineguy]

3. Not really

CDS's are a traded item whose prices can be run up by market forces, not always by underlying fundamentals. Traders are interested in making day to day, moment to moment profits on Swaps, they don't give a fuck if a country collapses.