Wait, if the CDS weren't a problem what was all the fuss about?

And why didn't Greece tell bondholders to go fuck themselves a year and a half ago? Of course, I wouldn't presume Planet Money is above publicizing pure propaganda:

In the end, though, Greece wound up forcing all bondholders to take a hit. And today, the committee that decides these things said, yes, Greece did default. And yes, CDS on Greek bonds will pay off. (Actually, the committee said a "restructuring credit event has occurred with respect to the Hellenic Republic." Which is the same thing.)

The CDS contracts will be settled by auction later this month, and it seems unlikely that the payouts will cause much trouble in the financial system.

The net payout on Greek CDS will likely be less than $3 billion, and most of that money has already been set aside by the companies who will have to make the payments, according to ISDA, the international body that oversees CDS.