Romania’s new Government, led by Mihai Razvan Ungureanu, received a confidence vote in Parliament Thursday, allowing it to continue reforms pledged by the previous government under a deal with the International Monetary Fund, EU and World Bank. Lawmakers voted 237 to two to instate the new Cabinet. The Cabinet required the confidence vote of at least 232 lawmakers. The opposition did not attend the vote. STRAGE as it may be, the new cabinet is very young, and made of the former communist sibilings...HAVING NO EXPERIENCE IN ADMINISTRATION, or background in runing anything !!!!
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, February 9, 2012
Romania - New Government ( made of very young inexperienced individuals)
Romania’s new Government, led by Mihai Razvan Ungureanu, received a confidence vote in Parliament Thursday, allowing it to continue reforms pledged by the previous government under a deal with the International Monetary Fund, EU and World Bank. Lawmakers voted 237 to two to instate the new Cabinet. The Cabinet required the confidence vote of at least 232 lawmakers. The opposition did not attend the vote. STRAGE as it may be, the new cabinet is very young, and made of the former communist sibilings...HAVING NO EXPERIENCE IN ADMINISTRATION, or background in runing anything !!!!
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Probably because CDS invocation is likely to cause financial meltdown.
The ISDA (a group of the most powerful people on the planet) who decide if it's a default, have managed to decide that 70% doesn't equal a default.
Who are most likely to hold the CDS contracts, that's right the very same people that make up the ISDA.
In Europe this is:Bank of America / Merrill LynchBarclaysBNP ParibasCredit SuisseDeutsche BankGoldman SachsJPMorgan Chase Bank, N.A.Morgan StanleySociete GenaraleUBS
I believe the way bonds are accounted for means they don't sit on the balance sheet at market value, so if they go down or up it makes no immediate odds. As long as they hold them until maturity all is good.
So:
1) If they default, they have to crystallise the loss on the bonds. Presumably with a time lag before CDS payout, making them really insolvent (not sort of insolvent like some are now)
2) The CDS effects on the counter parties will likely be similar, in that they haven't reserved anything with which to payout on the CDS, again leaving massive holes in the balance sheet.
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