Waiting for Lehman

2 posts / 0 new
Last post
Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Waiting for Lehman

http://gonzalolira.blogspot.com/2011/10/waiting-for-lehman.html#more

 

In Samuel Beckett’s play Waiting for Godot, the four main characters wait in vain—Godot never arrives.

In the financial markets, the same thing is happening now—we are all waiting for Lehman: That sudden bankruptcy-crisis-calamity which sets off a whole series of credit events, which in turn causes massive sell-offs, plunging markets, collapsing confidence, and ultimately—just like the bankruptcy of Lehman Brothers did back in 2008—shoves the entire global financial edifice right up to the very edge of the cliff.

But lately, my thinking has changed: Like the characters in Godot, I think that we’re waiting in vain. The Lehman-like event will never arrive because it won’t be allowed to arrive. So this miserable slog we are going through will continue—indefinitely. (Yeah, I know: Sucks to be us.)

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Greece Deal Won't Lead to Lehman-Like Event

 

http://www.cnbc.com/id/45059870

The deal that allowed Greece to renegotiate its debt will not lead to a credit event on the scale of the Lehman Brothers failure that triggered the US financial crisis, the lead negotiator in the talks told CNBC.

He said it is unlikely to cause a major problem in the market for credit default swaps , which are triggered in the case of debt defaults.

It was very important to provide a substantial amount of collateral — 30 billion euros — to help underpin the value of the new bonds."

Supporting the new bonds is crucial, he said, because “the new claims will be of higher quality (compared to the old claims) due to the funds provided.” That's a crucial condition to avoid having the debt exchange labeled as involuntary.

"I think it was huge to avoid an event," Dallara said. If it had not been voluntary, it "would have created a calamity."

"It was important for all of us at the same time to shore up the credibility of all the other sovereign credits and that has been accomplished by the firewall arrangements," Dallara said.

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments