ISDA: International Swap and Derivatives Association determines when a credit event is a default. The ISDA is controlled by the 5 major banks who hold 97% of the credit default swaps. They are more powerful than governments.
When Greece agrees with the bond-holders to a 70% hair-cut, the ISDA will determine that it is not a default and many financial institutions who bought CDS can go bust.
What happens when there is a 100% hair-cut? Will the ISDA declare it not a default?
Expect another round of Quantitative Easing - QE, which is good for equity market as liquidity will increase. Beneficiaries: Netflix, IBM, Google, etc. Grease of the wheels of the market is liquidity. Advent of QE is good for gold, negative for the dollar.
QE is not a solution as it creates money out of thin air. It's a bubble-making mechanism for the markets.
In the early 1990's the ISDA was formed by banks who issued CDS. ISDA will determine whether the default by Greece is a default or not. That will determine the fate of the banks in the Eurozone. They have the authority to determine a credit event is a default or not a default.
Coming default by Greece will be declared as not a default. There will come a point when a 100% haircut will declared not a default. What happens then?
January 30, 2012, at 7:37 pm
by Jim Sinclair in the category Ellis Martin Report
My Dear Friends,
I was interviewed today concerning the most powerful body in the financial world that now holds in its hands the near future of all markets, from currencies to commodities, based on a single edict to be given.
The interview is being processed and should be posted here later this evening.
This organization supersedes all governments and central banks today in terms of the financial power they edict. This organization can have a greater impact on your pocketbook than the FASB did when they killed "true value" accounting.
This body is made up of the key players of the five largest banks in the USA and other countries. This body by their actions this week will guarantee QE to infinity.
This is relevant to all your assets, yes all. If you have the time listen to it please. If you don’t have the time listen to it please. If you don’t listen to it do not blame me when all hell breaks loose six months from now.
Not one word about this body was on the airwaves today, yet this group by a simple decision rules the financial plant. They will be making this edict in just a few days. They have to do it again this year. It is then that you know what will hit the fan.
I feel this is it for jsmineset.com tonight. I do not want to write another word and detract from the revelations you will hear.
Your financial future, even if you have never heard of them, is in this organization’s hands. Check in later for the interview. If you don’t check in your finances might just check out.
Please remember you have been informed of this impending edict as a service to the community.
Will Malaysia be affected?