Automakers - Credit Event Trigger?
Mish has a post on the automakers being denied the bailout they have been lobbying for and what got my attention in the post is that he say it will be a Credit Event Trigger.
I have reported before that GM has a $trillion or so in credit default swaps written on it (but my information on this is well over a year old). If banks stocks rally tomorrow (or even if they simply do not collapse), you will know that banks are fully hedged or on the right side of those swaps.
However, given the swaps dwarf GM bonds, it is virtually guaranteed that someone is on the wrong side of them.
Contrast the trillion to the various billion numbers in the article. The CDS are big.
This is one to watch...