European Bailout Package Announced  - $1.3 Quadrillion Derivatives Implosion May Be Next

The announcement from the EU has been made, with the initial size of Europes bailout package announced as $1.7 Trillion USD. Details? What details!

As I write this (at 3:30 am cst), the stock markets seem to like the news, with Dow futures up 180 points, and similar gains happening globally. The question is, will the party last?

First, the details as we know them…followed by the HUGE risks that I see coming from this plan.

Here’s what we know so far, and one specific part of it is going to scare the ---- out of the $1.3 quadrillion (in size) derivatives markets, specifically the CDS market, or Credit Default Swaps.

First, the size. Trust me when I tell you that the announced size of $1.7 trillion USD is just the beginning. This “European TARP”…or Euro bank bailout, which is exactly what I predicted would be announced…will allow for a 50% soft default on Greek government debt. This IS a sover...