The Greek debt situation does not look good and people are right to wonder how exposed U.S. banks are. At this point, the direct impact appears to be minimal.

"The direct impact of a Greek default is almost zero," Jamie Dimon was quoted by CNBC. "The effect it has on the global economy will obviously filter down to the American banks too,” but “there’s a teeny chance of a catastrophic outcome, which is why the muddle-through is the only good strategy. There is no other good strategy.”

While banks do not seem overly exposed to Greek--or all of Europe for that matter--the same may not necessarily hold true for hedge funds. Not too long ago, hedge funds across the board were loading up on Greek debt.

Dealbook notes that “Starting in December, the counterintuitive, go-long Greece bet was one of the more popular pitches made to hedge funds in New York and London. Investment banks--Merrill Lynch was particularly aggressive in recommending the trade, investors say--argued that even though Greece was nearly bankrupt, those who bought the paper maturing in March could double their money when Greece received the next installment of its bailout, due that same month.”

Funds apparently learned little from the Jon Corzine strategy at MF Global. In any case, funds are now aiming to exit those go-long plays as the on-going restructuring negotiations portend a massive haircut for bondholders. Some funds are going to take some massive losses.

For more:
- here’s the CNBC article

Related article:
Greek crisis might be a massive credit event for Wall Street