A little while ago I posted on the XJO thread in response to RED asking about banks at risk.
I raised the issue of Credit Default Swaps and ANZ's overexposure. The same issue will now impact on the major resource companies who use CDSs as a way of hedging risk. This is no longer a technical issue the Fundamental Risk has just magnified overnight.
On the other side, resource exploration companies which have big numbers in terms of resources/reserves will be targeted by majors because hedging the risk of exploration in terms of CDSs is far too costly. It will be cheaper to takover known reserves. After this settles down (looking at August/September) we might see some aggressive buying by the majors.
German government will sit down today about the Greek bailout. No bailout then who knows?
A little while ago I posted on the XJO thread in response to RED...
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