If it was such a great deal why are U.S. banks backing off lending to European banks?
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — U.S. banks tightened standards for loans to their European counterparts in the last three months of 2011, increasing standards for the second straight quarter as the region’s debt crisis continued, according to a quarterly survey of the bank senior loan officers released Monday by the Federal Reserve.
great deal Greek bond holders lost 77 cents on a dollar US terms. Since there was no technical default the CDS can't be claimed. Europe's risk is still on the rise as the premium on the credit default swaps are a mirage. The probability of default on a trillion or so of EU debt is well over a combined 50%. Portugal, Ireland, Italy, France face a now typical credit default swap function the sellers of CDSs currently face a possible demand by the buyers of 500 billion US dollars.
According to several traders, the market generally assumes that if a country defaults, bondholders will receive roughly 40% of the value of the bonds well that's nice but Greek bond holders are getting 23%. Still, that number is somewhat speculative because there hasn't been a sovereign default in nearly a decade. The most recent example, Argentina, defaulted in 2002.
Oh yeah, remember? Just look at back at the beating the US banks took with the South American default's, big write offs.