Harry Reid Would Back Obama If He Bucks GOP On Debt Ceiling: Source

I view with a sense of whimsy the protestations against the striking of a Platinum Coin as an affront against the rules of Economics ... and the fist shaking cry of



"There will be Consequences!!!"



Really?



"Consequences!!!!"?



Anyone remember our friend Greece? Here's a fun story.



Greece is a severe debt problem (not the fun part) and much of that debt is associated with derivatives. Now, since derivatives are so exotic and squishy it is nearly impossible to determine the value of a bucket of securities comprising a CDO .... at least not in a way effectively fast enough to allow unencumbered investment in a timely way. So the geniuses of Wall Street came up with Credit Default Swaps as a way to affirm the value of a CDO via how much it can be insured for. Neat idea, huh?



Now, the thing is, when debt goes sour it kicks off a Credit Event that impacts the CDO, and the associated CDS. In theory, when a Credit Event occurs the holders of the CDS are on the hook. Generally International Banks and Investment Houses.



Greece has had a least two Credit Events since their crisis started, but, lo and behold, no impact on CDS. You see, the powers that be pulled a "Nevermind" on these defaults, letting everyone off the hook.



There were no consequences.
Read the Article at HuffingtonPost