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Quoting the Crisis
02/02/2012
“ Credit default swaps further muddy the waters. The restructuring is being designed in hopes of not falling under the technical definition of a default. But anyone at the negotiating table who has purchased protection through swaps might want to push Greece into a technical default to trigger payouts on the swaps. That trigger would hurt some European banks that not only bought bonds but amplified their exposure by selling default protection to others. That risky strategy is jokingly known as a “Texas hedge”—i.e., not a hedge at all. Richards of Marathon declined to discuss whether his hedge fund has bought default protection—and noted that he is pushing for completion of a deal. „
(
Source:
businessweek.com
)
Peter Coy and Matthew Philips in A Greek Default: It’s a-Comin’ - Businessweek
