Breaking:5 Major US banks face massive (trillions) default on credit default swaps within weeks

[stockholmer]

5. A further boildown: It will be the big banks (who control ISDA) vs everybody else (pension funds,

hedge funds, other nation's, states, municipalities, etc etc).

If ISDA says a write down on Greek debt to 30% is NOT a default, then ALL the entities who purchased insurance (credit default swaps) on their investments in Greek bonds will be wiped out (just like MF Global was).

This will quickly spiral out of control, and hundreds of millions of people worldwide will be indirectly or directly affected. Imagine if your entire union or state pension fund is wiped out. Imagine if the broker who was all your IRA money is bankrupted, and then seizes your money, even though you never lost anything in the market.

If ISDA says it IS a default, the 5 big US banks will be crushed, and this will also trigger a spiral. They will literally go to war to blackmail the world for tens of trillions in bailouts.

It is a classic clusterfuck, and this is all based off a writedown in greek debt to 30%. I truly belive that by years end, there will be a 100% writedown by Greece, as they are already facing an ever-growing danger of looming civil war. The unemployent rate of 30 year olds and younger is over 50%.

And finally, it gets worse, as Portugal, Hungary, Ireland, and the bigger nightmares of Spain and Italy impending defaults loom ever closer.