ReprintsCDS spreads imply that around 10% of American firms will be forced into default.
We saw it then: They're forced into default or foreclosure.
But if the crisis countries are forced into default, they'll probably face severe bank runs anyway, forcing them into emergency measures like temporary restrictions on bank withdrawals.
Last July, when United States federal judge Thomas Griesa ruled that Argentina had to repay in full the so-called vulture funds that had bought its sovereign debt at rockbottom prices, the country was forced into default, or "Griesafault".
If further aid is conditioned on a similarly incoherent set of economic policies, Greece will eventually be forced into default, creating an even deeper hole in European bank balance sheets and adding to fears that other deeply indebted countries might soon default as well.
Meanwhile, Tina Feldstein, president of the Prairie District Neighborhood Alliance, said, "Many people are forced into default now because they simply cannot afford their monthly assessment, their special assessment, and they can't refinance because their property wouldn't appraise for what it would have to appraise for".
In reality, 100% LTV loans practically guarantee that any household misfortune will be substantially magnified, either because the household will be forced into default or because it will be stuck in a bad situation by its inability to sell at a profit.
What's happened now is that the ECB sounds increasingly willing to act as the necessary lender, and that in general the softening of austerity rhetoric makes it seem less likely that Italy will be forced into default by sheer shortage of cash.
Mosler recognized that Italy could not be forced into default: It could print as many lira as it needed.
Or would they force you into default?
