Sure, it has been in the rumor mill for a while now. But, now that the French and Germans have imposed their vision of a “voluntary writedown” on private investors, it is still amazing to see the lengths that the authorities will go to declare the event a non-default.

The Wall Street Journal has a good blog on the subject: “So, about that insurance you bought on Greek Debt…” which covers the key details.

For the market, the dance will go on. Anyone who might suggest that this little manouver will disrupt the fragile fabric of the market is more than a little desperate for attention.

For investors, this little drama should serve as a “Caveat Emptor”. Not all investments are created equally and not all of them have the rights to the underlying assets that their promoters might hint at. When commentators brush off the risk of an ETN, which is backed by the sponsoring bank’s balance sheet, versus an ETF, which should be backed by assets that are subject to periodic audit, think back to the “smart money” hedge funds who will soon have to explain to investors why they were unable to capitalize on a sure thing like Greece’s default (oops, sorry, voluntary restructuring).

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