''A Greek Default, the CDS Market and the End of the World''

from daily reckoning....

"A not-so-funny thing happened on the way to the latest Greek bailout.

The terms and conditions of the bond swap Greece agreed to before getting another handout constitutes a theoretical default - but not a technical default.

That's not funny to CDS holders.

Greece hasn't defaulted (so far), but some of the buyers of credit default swaps, basically insurance policies that pay off if there is aGreek default, claim the terms and conditions of the bond swap constitutes a "credit event" or default."