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Is Greece the Next Lehman Brothers?

On Thursday chatter on the Street had everything to do with the financial woes facing Greece and whether they could spiral out of control – in much the same way they did with Lehman.

“I’m very worried about a default,” says top hedge fund manager Anthony Scaramucci. "It could creates a domino effect."

That may seem alarmist, but that also seems to be how the market is betting. "Looking at CDS spreads in Greece, they're pricing a 75% chance of default," explains host Melissa Lee.

That's a problem because in the event of an unplanned default, the ECB, as a lender of last resort, would theoretically be bound to prop up Greek banks, whose capital primarily consists of Greek sovereign debt.

That in turn would require the ECB's equity owners, the major Eurozone economies, to provide more capital to the bank. That is before possible contagion to other Eurozone sovereigns and their banks in vulnerable countries such as Ireland, Portugal and Spain, is even considered.

Although it stands to reason the ECB would intervene before the situation spirals out of control, part of the fear is that dissent in the European Union will cause the ECB to wait too long before they move.

Then the speed at which the crisis unravels comes into play.

In fact, Chris Whalen of Institutional Risk Analytics tells us events could unravel so quickly that there's the potential for another Lehman.

And that has Wall Street desperate to learn which banks are most exposed to Greece. Trouble is that's not easy to determine.

"The market believes its the French and the Germans," says Whalen, "but we don't have a lot of data. There is very little disclosure in a public sense."

Already, Moody's has placed France's top three banks, BNP Paribas, Societe Generale and Credit Agricole , on review for a possible downgrade, citing the banks exposure to Greece's debt crisis.




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Trader disclosure: On June 16, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (NUE); Adami Owns (MSFT); Adami Owns (BTU); Finerman Own (AAPL); Finerman Owns (BAC); Cortes owns (GOOG); Cortes owns (SVU); Cortes owns (MS); Cortes owns (GS)
Cortes owns (RIMM); Cortes is short the Nikkei; Cortes is short the Euro; Cortes is short the Australian Dollar; Cortes is short Silver; Cortes is short (BIDU); Cortes is short Corn
Cortes is short Natural Gas

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