LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

derivative collapse is in the air..

[baranja]

https://www.zerohedge.com/news/2014-07-14/nomura-threatens-espirito-santo-cross-defaults-said-demand-immediate-repayment-%E2%82%AC100m

Boys, this is what triggers derivative collapse. Just one big bank goes down and that's it, it triggers it all. Remember, Goldman Sachs has 100 Billions (with b) in Assets and 40 Trillions (with t in derivatives)

Nomura Threatens Espirito Santo Cross Defaults, Said To Demand Immediate Repayment Of €100MM Loan

...when it reported that Nomura threatened to seek the immediate repayment of at least €100 million of loans to Espirito Santo Financial Group, prompting today’s sale by the Portuguese co. of a stake in Banco Espirito Santo, according to people with knowledge of the talks who asked not to be identified.

It also explains why while the market has since moved on, BES bonds tumbled once again to record lows earlier as we reported previously, and Senior CDS blew out by 48 bps to 448 bps: the widest since October. It probably goes without saying that after trading to all time intraday lows, BES stock closed at just shy of its all time low price.

And while the market is once again convinced there are no concerns of contagion, Bloomberg added that "failure to repay the loan could have triggered multiple defaults across cos. within Espirito Santo group, said the people." In other words, precisely the kind of liquidity waterfall (in the wrong direction) that took out AIG and pu

[bigdaddycash]

You are most certainly correct that the derivatives market is a house of cards.  I worked in the fixed income derivatives market (specifically interest rate and cross currency swaps) and can state the ISDA boiler plate agreements include clauses that would cause implosion once counter parties start to default.  The agreements include broad acceleration clauses such that once an entity

[baranja]

Yes, correct bigdaddy, you understand that. At the end, account holders in those instutions are due to pay for those losses. (hair cut). But when chain reaction triggers there will be no "money" on this planet to pay for those losses.  they WILL HAVE TO brutally print gazzilions of dollars to  "fix" that. Note,.. just listen to muppet media,... what were saying

[baranja]

If I own you money, it is my problem. If I own you a lot's of money, it is your problem.

[bigdaddycash]

All of the banks that had fixed income derivatives books actually structured separate entities for which all the derivatives agreements were channelled.  The derivaties entities were structured and capitalized such that they would have AAA credit ratings regardless of the rating of the underlying bank's credit.  This would give the counter parties the reassurance that the party they