Defaulting banks - where will it stop?

[Jan Klimkowski]

Zero Hedge's reading of CDS trades suggests France is next in the cross hairs of, ahem, perfectly rational free market global capitalism.

If CDS Traders Are Right, France Is Next Up For A Sovereign Shakedown (As Are Spain And Portugal); Greece Long Forgotten
Submitted by Tyler Durden on 04/17/2010 22:43 -0500

Dubai France Germany Greece Japan Net Notional Portugal Primary Market


CDS traders were prescient in snapping up Greek and Dubai CDS long before anyone else realized the risk these countries are in (well, more like Goldman selling CDS to some very close clients, wink wink). In exchange for figuring out what it took cash bond holders months to understand, these 'speculators' made a lot of money and in the process got branded as quasi-sovereign terrorists. Well, Greece can sleep well: according to the latest DTCC CDS data (for the week ended April 9), CDS specs have completely deserted Greece, which saw the single biggest amount of Net Notional CDS decrease, to just over $8 billion, a reduction of $367 million in the prior week (which means all the widening in Greek spreads is now, and has been, just cash bond sales, precisely what Zero Hedge has claimed all along). CDS traders are now focusing their attention on the one country which has so far slipped under everyone's radar, yet which we disclosed is more on the hook in terms of Southern European exposure than even Germany: France, with $781 billion in total claims. Should Greece topple the PIIGS dominoes, France will implode. And this is precisely what CDS traders are betting on now, taking advantage of absurdly tight France CDS levels. Also, just in case they are wrong on France, Spain and Portugal, not surprisingly, round out the top three names in which Net Notional saw the largest increase. Also not surprisingly, Japan rounds out the top 5 deriskers.

http://www.zerohedge.com/article/if-cds-...eece-long-

If French workers start suffering salary cuts, losing their jobs and their pensions to "Anglo-Saxon capitalism", their response will make the Greek riots look like a Girl Guides' tea party.

French cops will contribute to the ratcheting up of tension. Les flics love cracking pretty young heads with batons.

I remember seeing an environmental protest in the French Pyrenees with a bunch of young greens chained up to trees and machinery at a logging mill. They were passive - classic civil disobedience. Les flics started salivating in sadistic anticipation: their prey had chained itself up the better to receive a good beating. A few Gallic warcries later, the cowards duly and bloodily delivered the thrashing.

The application of widespread economic Shock Therapy to the "developed" world is a new, if inevitable, chapter in Their lust for Power and Control.

They probably think it's going to be a cakewalk. I suspect it will bring Khaos and Anarchy.

But then Khaos and Anarchy may be the ultimate aim of the Sponsors.