Thread: Will Greece be a Contagion? Spread to US Banks?

Greece is hurting big time, check out their GDP compared to the rest of the OECD countries.

1. Gross domestic product

I know in the US hedge funds are moving a lot of the CDS market. I think the Germans are holding a lot of Greek debt in bonds hopefully they didn't pay for protection out of pocket. since they are such a small country with a rather low GDP they really don't have that "much" debt when compared to larger countries. Their heavy trading partners will bear the lions share if they need to do anything drastic again.

You can find a lot of data on the IMF website below:
World Economic Outlook Database April 2011

From the report below:

* Banks hold collateral to cover 72 percent of their NCCE. The quality of the collateral is very high, as 79 percent is cash (U.S. dollar and non-dollar).

* Trading risk exposure, as measured by value-at-risk (VaR), has declined for each of the five major dealers since the first quarter of 2010.

* Derivatives contracts are concentrated in a small number of institutions. The largest five banks hold 96 percent of the total notional amount of derivatives, while the largest 25 banks hold nearly 100 percent.

* Credit default swaps are the dominant product in the credit derivatives market, representing 97 percent of total credit derivatives.

* The number of commercial banks holding derivatives declined by 23 in the quarter to 1,047.


http://www.occ.treas.gov/topics/capi...ives/dq111.pdf

Yeah, I think Greece will have an effect here. Banks are too interconnected for it not to. Although it may help us in the short term. Lowering of gas prices and such as Greece buys up our currency.

EU cant and will not allow Greece to get bankrupt, It will create a domino effect in all Europe.