As per the statement:
"In brief, it is our view that each of the two financing options described in the FBF proposal would likely amount to a default under our criteria."
The problem here is that ANY default recognized by the credit agencies triggers Collateralised Debt Swaps (CDS), a type of insurance that makes the bond owners whole, i.e. they receive 100% payout.
Talk about a winning hand, but who wrote the "insurance"?
This is the scary part; nobody really knows.
The Bank of International Settlements (BIS), the so called central banks, central bank, recently estimated that US banks have around $32 Billion of exposure.
That leaves around E160 billion of gross debt insured by "other banks".
To quote Ludwig von Mises:
"...all problems are linked to one another. In dealing with any part of the body of knowledge one deals with the whole."
UPDATE 4th JULY:
Click here to see the latest breakdown of who owns Greek debt.
