Stress tests of Europe's biggest banks are due to be released on July 15th and are expected to show that the region's banking system could absorb the losses from a Greek default with only a dozen or so banks having to raise extra capital.
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We saw what happened in the summer of 2011 when Congress did flirt with default, when House Republicans in particular used that as an issue to try to achieve some political objectives and just the mere flirtation with default caused severe economic harm, which I spelled out yesterday.
Massive bets against a firm with credit default swaps along with short sales, especially naked short sales, can logically become a self-fulfilling activity, which may or may not have done Bear Stearns in.
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When it defaults via inflation, it forces private debtors to default along with it.
These countries need to default, with banks such as Deutsche Bank (NYSE: DB) and others taking haircuts on the government debt they own.
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For example, an investor or bank may have bought a swap as insurance against an AIG default, with Lehman on the other side of the deal.
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To encourage people to enjoy the benefits of lunch, we need to change the lunch default rule with the kind of "libertarian paternalism" advocated by Richard Thaler and Cass Sunstein in their book Nudge.
"opt-in": Should users have to agree to have their online behavior data collected, or should sites legally be allowed to track their behavior by default, with an option to stop that collection upon request?
"The days when a major insurance company could bet the house on credit default swaps with no one watching and no credible backing to protect the company or taxpayers from losses must end, " Mr Geithner told Congress.
In stepped the investment bank industry with another solution: We'll take your mortgages, securitize them, slice them into categories based on default risk, use computer models to match default risk with yield and sell them to buyers around the world.
It was a release valve that allowed the parties to reach a deal on the debt limit in the summer of 2011 to avoid sending the nation into default, with the understanding that a broader agreement on the debt and deficit would be reached.
Those with strong credit ratings were 50% more likely to strategically default than those with lower scores.
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But privacy activists are deeply unhappy with the site's decision to make more data from individuals' Facebook profiles available by default to anyone with access to the internet.
It sold down its interest in Clearwire to below 50%, supposedly to deal with cross default provisions related to its long regretted merger with Nextel some years ago.
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Their assumption seems to be that a real default (and along with it a triggering of the credit default clauses in all those CDS contracts) would be a bad thing for the banks and thus a credible threat to get them to line up for the voluntary version.
We believe that during economic expansion, the default risk associated with high-yield corporate bonds lowers.
The default risk resides with the Greek central bank and, ultimately, the Greek government.
But who, you might ask, is buying this debt at these prices with default so close?
Two decades ago, it was a complacent default identity, with many English using Britain when they meant England.
Financial institutions are underwriting Shariah-compliant loans and bond issuances without really understanding the risks associated with default and bankruptcy treatment.
The CSPI recommendations include offering more fruit and vegetable options and making those the default side dishes with every children's meal.
As a result of their flirtation with default, the stock market plummeted.
Most important, by changing international law, politicians would send a strong signal that they were serious about creating a procedure to deal with default.
Our lives used to be private by default, yet with the advent of each new social network, privacy has become increasingly difficult to preserve.
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Republicans should waste no time starting to explain their debt-limit terms, so voters also understand the GOP isn't toying with default as a political ploy.
Let's just remember what danger awaits the pursuit of that path, the harm that was brought to this economy simply by the flirtation with default in the summer of 2011.
Among the most cautious is China, which has been selling American agency bonds since their main issuers, Fannie Mae and Freddie Mac, the two mortgage giants, flirted with default in mid-2008.
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The simplest way to cope with default by private borrowers is to improve the inadequate domestic bankruptcy laws that still prevail in many emerging economies, something that is slowly under way.
Well, speculators are now demanding more to be compensated for the risk of a default among banks with exposure to the peripheral countries of Europe than they were seeking during the Lehman crisis.
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