Some of you may recall my rant about the ISDA pronouncing that a credit event on Greek sovereign CDS would not get triggered as long as private creditors “voluntarily” agreed to the 70% haircut on their bond holdings. There is something called a collective action clause (CAC) where if a super-majority of bondholders agree to the haircut then all other bond holders have to comply. The news today was hinting that perhaps a super-majority would not be achieved, hence.
This weeks market action is largely profit taking, booking gains for the year and such. The global growth slowdown CANNOT be NEW news, it is just that the market decided to pay attention to it now rather than a few weeks ago when I bailed. Prices this morning are near those levels now, but I don’t want to be buyer still. There is probably some support in the low 1340s where all of February gains will be gone. Markets do such things periodically you know. Let prices come to you.