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Game Over? Senior IMF Official - "I Expect A Hard Greek Default This Year"

Tyler Durden's picture


While the US was panicking over a double zero jobs report, things in Europe just fell off a cliff. As both the WSJ and Reuters report, it seems that the second Greek bailout, following repeated and consistent disappointments by Greece which has resolutely refused to comply with the terms of its fiscal austerity program, has just collapsed.And with the US closed on Monday: long a counterbalance to European risk pessimism, this week (especially with the news fro the latest FHFA onslaught against global banks) may just be the one that "it" all comes to a head. But back to Europe, and more specifically Greece, which it now appears is doomed. "I expect a hard default definitely before March, maybe this year, and it could come with this program review," said a senior IMF economist who is keeping close tabs on the situation. "The chances for a second program are slim." It is not only Greece - Italy also thought it would sneak by with getting quid pro no and continue leeching off of Europe, or specifically Germany, indefinitely, at least until the ECB said that absent Berlusconi taking austerity seriously that implicit ECB support for Italian bonds would be yanked, sending the second most indebted country in the world into a toxic debt tailspin. And so it comes that after 2 years of waffling, Europe finally realizes that the piper always eventually gets paid. Alas, it is now far too late.

From the WSJ:

Talks over new bailout funds for Greece were suspended Friday amid disagreements over how to fill a government-deficit gap that once again is veering off track, raising doubts about the country's future access to finance and triggering renewed nervousness in financial markets across Europe.

The suspension pushed yields on Greek government debt to levels indicating that investors see a default by Athens soon as a near certainty: Interest rates on one-year paper blew out past 70% and two-year yields rose close to 50%.

The continent's stock markets also retreated, with the French market down 3.6% and the German market down 3.4%.

The suspension of the talks in Athens between the government and a group of officials representing the providers of Greece's bailout cash came, officials said, amid a dispute about how to address new gaps opening up in the government budget deficit.


"The Greek side insisted the missed targets are the result of the recession. The troika said recession played a part, but Greece basically didn't keep up with its commitments, so more measures will be needed to make up for the lost ground," said a person with direct knowledge of the talks.


"There is a clear disagreement that can't be bridged today," the person added.

Will it be bridged in mid-September, and is a market and EURUSD crash all that will take, as has been the case constantly? We will find out soon, although it increasingly appears improbable...

"I expect a hard default definitely before March, maybe this year, and it could come with this program review," said a senior IMF economist who is keeping close tabs on the situation. "The chances for a second program are slim."


Failure of Greece to meet its targets, growing reluctance by some euro members to continue lending and the fact that private-sector participation in a second bailout won't significantly alter Greece's debt profile are the primary factors, the IMF official said.

It gets worse: as Reuters confirms, the political turmoil has already spread to Germany, where all that is needed for wholesale conflagration that will sweep Merkel out of the cabinet is a tiny spark. This may just have been it:

Christian Lindner, general secretary of the Free Democrats, (FDP) junior coalition partners in Chancellor Angela Merkel's center-right government, said Athens was endangering European solidarity.


"The breakdown of talks between the Troika and Greece is a blow to the stability of the euro," he said at a news conference in Berlin.


Referring to Greece's failure to meet deficit targets set in exchange for a second bailout package, Lindner said Athens was shirking responsibilities to which it had agreed.


"This is not about non-binding statements of intent, but contractually secured reciprocity for the emergency loans," he said. "We insist these agreements are observed."

Goodbye Greece:

Separately, senior FDP official Hermann Otto Solms, a vice-president of the Bundestag and an economy committee member in parliament said since Greece could not handle its debt problem and it should consider leaving the euro.


"It should be considered whether a restructuring and exit from the euro would offer better perspectives for the currency union and Greece itself," he told Frankfurter Allgemeine Sonntagszeitung.


The pro-business FDP styles itself as a defender of the German taxpayer, a stance Lindner reiterated in his statement over Greece.


"Taxpayers in Northern Europe and especially Germany cannot accept inability or reluctance. In the eyes of the FDP, Greece must reaffirm its will for stability and reform."

Alas, a Greek departure from the Eurozone, which now seems inevitable, will have a major impact on Europe's financial institutions. This is, however, not news to the market, which over the past few days, has sent not only the Libor-OIS spread to 70.6 bps (up 5bps overnight), or its widest level since April 2009, but has pushed Libor higher for 28 consecutive days - the longest stretch sine 2005, to its highest since August 19, 2010. Furthermore, the spread between the minimum and maximum 3 month USD Libor as self-reported to the British Banker Association, has hit a 2011 wide.

So is the worst bank some derelict husk of toxic assets like Barclays and RBS? Yes... RBS is certainly #2 in the top three highest reported Libors, or institutions that find it most difficult to procure USD funding. So who are the other two most troubled banks: SocGen? BNP? Bank of America? Nope...

That's right: CSFB and UBS. It appears that in a parody of Biblical allegory, the first shall indeed be last, as what was once a bastion of liquidity and solvency, Switzerland and its indomitable banks, is the first to topple should Greece finally be kicked out.

And should the two biggest Swiss indeed banks go out with either a bang or a whimper, then, well, all bets are off.


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Sat, 09/03/2011 - 15:15 | 1629811 moonstears
moonstears's picture

So BAC down the tubes, Tues?

Sat, 09/03/2011 - 17:05 | 1629999 Highrev
Highrev's picture

Now it only remains to be seen if this has already been priced in or not.


Sat, 09/03/2011 - 22:46 | 1630576 dogbreath
dogbreath's picture

Do you think there are enough prosecutors   and

or will they drop the charges because they believe it will be impossible to get a conviction with the evidence as it stands

Sun, 09/04/2011 - 01:22 | 1630758 spiral_eyes
spiral_eyes's picture

I think a lot of wall street people (especially goldman) want a crisis to take down rivals, like they did with lehman, and acquire the juiciest parts for pennies on the dollar. 

I also think that all the prosecution and regulation is a temporary panacea. It won't remove the problem, because the problem is the parasitic megabanks.

Only the full crash — the so called zero that gold hedges against — will remove the problem. And the crises will keep coming back 'til we get it.


Sat, 09/03/2011 - 15:16 | 1629813 moonstears
moonstears's picture

Got Silver, bitchez?

Sun, 09/04/2011 - 05:20 | 1631069 goldm3mb3r
goldm3mb3r's picture

Some people seem to be hoarding Bitcoins. Good luck with that.

Sat, 09/03/2011 - 15:18 | 1629820 Eireann go Brach
Eireann go Brach's picture

Tim Geitner just shit his pants according to a local reporter in NY, the stain was clearly seen on the left trouser leg as he got up to leave the lunch table, reports are the other caller was some guy called Ben crying and screaming on the other end!

Sat, 09/03/2011 - 15:19 | 1629822 Newsboy
Newsboy's picture

What is the global new deal gonna' be?

"PArtial Gold Standard"?

How will that squeeze me and save banks?

Sat, 09/03/2011 - 15:20 | 1629826 BarryG
BarryG's picture

Have you seen former Brit PM Gordon Brown's comments about the agitator of the financial crisis?

The country that was "providing the drinks" to the party?



Sat, 09/03/2011 - 18:49 | 1630234 spiral_eyes
spiral_eyes's picture

host of the party gonna lose 133% of GDP to ESFS!

Sat, 09/03/2011 - 22:51 | 1630583 trav7777
trav7777's picture

the anglo-american banking system is rotten to its CORE and should be crushed.  All the confettiers should be done away with

Sun, 09/04/2011 - 06:46 | 1631080 scratch_and_sniff
scratch_and_sniff's picture

Indeed, and if they weren’t supplying all the drinks, they are certainly going to be providing the taxi's home. No one has manipulated this crisis more than the Germans, their motives are clear for everyone to see now with checkbook in one hand, stick in the other, the post-modern equivalent of the goosestep and Panzer. The German peoples are one of the most softheaded and malleable races on the planet, the government will keep bailing out and looking for eventual surrender of sovereignty of the peripherals, and the German people will sit back and watch it happen, just like they always do, they are legendary for it. Next up for Germany is an unholy alliance with the Russians. The best thing Europe can do is to part from the Germans while they still have a clean shot.

And those fucking frog munching spineless turncoat surrender monkeys are up for some of the spoils too, i dont want to spoil my sunday thinking about it.

Sun, 09/04/2011 - 07:24 | 1631112 Ghordius
Ghordius's picture

very logical

so for you Europe would be fine if you exclude the "manipulative while manipulated" Germans, the "unholy" Russians and of course the "surrender monkeys" French. From your tone I can imagine you don't care much for the Southern Wogs.

perhaps in Sweden we can find a few cute teenagers you would recognize as human?

pathetic - I wonder how much of ZH you understand - or perhaps you are just for the ads?

Sun, 09/04/2011 - 07:35 | 1631124 Ghordius
Ghordius's picture

you got me there - at my age trolls are still something out of Tolkien books and I never encountered a "Certified Troll" before.

P.S. How lunatic must someone be to set up a "Germany Watch" blogspot?

Sun, 09/04/2011 - 08:51 | 1631169 scratch_and_sniff
scratch_and_sniff's picture

It is logical, its not only logical but imperative they get rid of the Germans, they are poison. But they wont get rid of her, they will have to drag her out kicking and screaming, it will do all it can to stay in and control it; that’s why all these little dramas over Greece and the peripherals are nothing but a smoke screen - which you will see on 23rd sep when Schauble rushes through his bid for an overhaul of the EFSF, that guarantees limitless money for bond buying, the right to bypass parliament and enshrine taxation without representation, and also guarantees that ESFS commission members be given immunity from prosecution and remain free from any accountability. (come back to me whan that happens, and we'll continue the conversation)


They are also holding up the Euro exchange rate with China(Germany doesn’t care about 10c on the Euro, all its exports are high end and in high demand, people that buy Mercs and BMW‘s don’t worry too much), they pressed for rate rises in 2007 and again in 2010 and 2011 at the worst possible times imaginable, and that’s also why they wont be cut next week. Its not about not hurting Germany, its about turning the peripherals in to basket cases to pull off a power grab extraordinaire. Ireland is bucking the trend spectacularly, but the Germans and the surrender monkeys want her to concede her only competitive advantage and bring her corporation tax in line to seal her fate.

If the other members could create the Eurobond without Germany, they would have a combined debt market more liquid than Japan and only marginally smaller than the US, it would mean that the weaker members could no longer be picked off by the wolf pack, and Germany would go green with envy and promise to be a good girl. Someone needs to call Germanys bluff before its too late.

(as for not caring about the “southern wogs”, hand on heart, I couldn’t give a flying fuck about any of Europe, it’s a disgusting fudge and a dangerous, undemocratic monster that’s well past its sell-by date - it was designed to bring Germany in from the cold, now the Germans are hogging the fire while everyone else freezes to death)

Sun, 09/04/2011 - 11:58 | 1631390 PY-129-20
PY-129-20's picture

Your rhetoric is a rhetoric of the past. It's symbolism is a relict of the past. Emotion is underlying your reasoning. You use images and symbols of the 20th century and you try to instill fear and to raise anger.

I agree with you that this currency union failed. But if you think it failed because of Germany, you are wrong. You think monocausal and that's why your explanation will always be wrong.

Other countries have used much stronger words than Germany. Netherlands, Austria and Finland are not making regularly headlines in this discussion, but they are basically on the same side as Germany. Germany is financing 27 percent of this bailout package and still it was not as offensive than Finland (which finances only a meagre percent).

But you use the old image of a Germany that wants to control Europe and create the Fourth Reich. This is the most ridiculous thing I've heard so far. Although Germany has a population of more than 82 million people, it still has the same voting power as other major European countries - GB, France and Italy. Spain and Portugal have more votes than Germany; (Italy 29, Spain 27, Greece 12, Portugal 12, Ireland 7; Germany has 29 votes).

And even if you look at the top EU politicians - van Rompuy, Draghi, Trichet, Ashton, Barroso, Rehn - they are not German. Oettinger is the only German in a top position (energy department).

But I would be happy if Germany would leave this Euro experiment. It does not necessarily mean to return to the DM - which was a good and stable currency - we could create a currency  with countries that haven proven to be good and responsible partners - like Austria, Netherlands, Finland.

And btw: Isn't it a good thing that Germany today has a better relation to Russia? Even the US is improving it's relationship to Russia - as could be seen recently with the big oil partnership. In my opinion Germany should do the same as Switzerland - be a neutral country, do not interfere with foreign problems.

Sun, 09/04/2011 - 12:28 | 1631424 scratch_and_sniff
scratch_and_sniff's picture

"Other countries have used much stronger words than Germany. Such as Netherlands, Austria and Finland" The difference is that these countries actually mean what they say! The Germans say it because they are lying to their public and want to buy time. And if you think that Germany has all of a sudden become a big cuddly Euro teddy bear, then you are either German, or mad. Don’t take my word for it, here is STRATFOR's take on Germany;

"German power will creep back into the world as Berlin attempts to grow its economic domination of Europe into a political structure that will last for decades. The European debt crisis is a catastrophe by all definitions save one: It is enabling the Germans to use their superior financial position to force the various Euro nations to surrender sovereignty to a centralized authority that Germany controls. Unlike the Russian regeneration, the German return is not nearly as robust, multi-vectored or certain. Nonetheless, the Germans are manipulating the debt crisis to achieve the European supremacy by diplomacy and the checkbook that they failed to secure during three centuries of military competition. "

Couldn’t have put it better myself...

Sun, 09/04/2011 - 12:39 | 1631439 trav7777
trav7777's picture

wtf is wrong with a resurgence of German power?  Are they going to kick out all the confettiers again?  oh nooooooo

Sun, 09/04/2011 - 12:55 | 1631472 scratch_and_sniff
scratch_and_sniff's picture

Nothing wrong with any country becoming powerful Trav, the issue is how they go about taking power from others. BTW it has nothing to do with confettiers; if Schauble gets his way in September, the Germans have become the confetti master generals. (i dont have a particular gripe with the German joe public by the way, i spent some of the best years of my life in Germany)

Sun, 09/04/2011 - 15:38 | 1631863 PY-129-20
PY-129-20's picture


- have you read the book of George Friedman "The Next 100 Years" ? Because I read it. Fine, it's his opinion and of course he admits that he has no crystal ball - but he was wrong on so many points and even after one and a half year after it's publication, you can clearly see why he failed to even see one year ahead.

Yes, from time to time they have a nice analysis - but they aren't some kind of prophets. Yes, I am German. I know the historical und cultural background of my society and I know how sensitive we've become about this topic. That's why I find it utterly ridiculous.

Sometimes I wish you could take our perspective for a moment here. A nation, divided into two parts for almost half a century, bombed into oblivion, millions of men dead or kept as prisoners of war, some territories lost forever (like Koenigsberg, East Prussia - millions that lost their home, refugees, not welcome in mainland Germany) - and the shame about the horrific deeds some of our men (and of course the regime as a whole) commited.

Of course we deserved some of it. Not all. We started that damn war, we followed a mad man. We weren't the first that slaughtered and butchered parts of our own (and that of other nations) population (not only the jews, but literally everyone that was against that regime) - It has happened in every culture in this world and unfortunately is part of human culture - it happened in Africa, in Cambodia, in China (Mao), Russia (Stalin), Turkey, Serbia, South America, Easter Island - and even the United States doesn't have a white shirt. I don't want to relativate this tragedy. The very German thing about Holocaust is to kill people in such an orderly fashion, almost like producing a car. A factory of death. With numbers and numbers to achieve. That's the frightening and scary thing about it. The complete dehumanization that happened in these few years.

Germany has changed. We are a nation of pacifists today. Some may find this irresponsible and not a good thing at all. Now you're saying we buy the influence with our money. Do you really think that would work? For years we sent billions to our European neighbours and we supported them - we found it was our duty to support them after all we had done to them many decades ago. We wanted a strong Europe - a partnership of strong nations. That was the plan for Europe - to be able to compete against bigger economic powers in the world - like the USA or China.

Look at the current decisions - the ECB buys Spanish and Italian bonds - you think that Germany is in favour of this policy? Maybe some politicians are (not all of them), but the majority of Germans and the Bundesbank is strictly against this.

You think we like this situation? Don't you see how uncomfortable this is for us? No, Germany never wanted to be completely in charge. That was more the part of France - to lead Europe and we assisted them, glad we could mind our own business. And that's the only thing that you could criticize about us - that we minded our own business for years and years and did not criticize the irresponsible behaviour of our own neighbours earlier. Why didn't we do it? Because we were afraid to be seen as the old Germany - that Germany that wanted to control Europe.

And now everywhere images of that old Germany reappear - Merkel as Hitler, Germany trying to create the Fourth Reich. No, this is far from our real intentions. In fact, we wish we wouldn't be in charge - that France could lead the way out of this. But France is in a weak position and now everyone expect us to deliver the answer. And we are stunned and feel uncomforable about this.

I can understand the fear - we invaded the countries, occupied them, bombed them, killed their people, destroyed their sovereignty and looked at them as Herrenmenschen - I can understand that fear. Quite remarkable given our history - for almost thousand years we had no influence at all in Europe, because the HRR was weak. Other nations strived to conquer the world - like the British Empire, the French, the Spanish, the Portuguese, even the Dutch - meanwhile Germany did not even exist - hundreds of little German principalities existed. Easy to manipulate them and to gain control over Germany. I'd say it changed with the French occupation during the Napoleonic Era. For the first time everyone longed for a strong German Empire that could not be defeated by any foreign power. And with 1871 that spirit established the era that lead to the first world war and finally with WWII our reputation as fierce and cruel warrior was created (of course nourished with the knowledge of the Ancient Rome and their tales of Germanic tribes and the defeat of Varus). The Huns - Barbarian hordes. Quite remarkable for a nation that had so many great minds (musicians, philosophers, writers, engineers and inventors).

Isn't it remarkable that the French nation, a nation that once had a great conqueror like Napoleon, that helped the Americans with guns and troops during the Revolutionary War, is today seen by some Americans as a nation of wimps and cowards?

I respect and love the French and I wish that we would not be in this situation today. I hope that this will not create another war in Europe. The Euro is not a currency of peace as many had hoped. Instead it created unrest, uneasiness - it also brought back the ghosts of the past.

Sorry for any errors and for the long reply.




Sun, 09/04/2011 - 16:08 | 1631932 scratch_and_sniff
scratch_and_sniff's picture

You're right about STRATFOR, they have come out with some howlers in the past and will no doubt continue the tradition well into the future. I cant say i am an expert on geopolitics, probably as naive as they come, but one thing i believe is that there is a certain calibre of scoundrel that toils away in the dark recesses of all governments, intelligence and security services, and foreign policy offices that actually thinks in terms of political and geographical hegemony, coming up with new and exciting ways to exert dominance and power over other regions is probably part of the basic job description, and this crisis would have them with a hard-on. These kind of scumbags exist, you are not one of them, me neither, im just an ordinary guy and understand how you feel, and none of that shit was done in your name. (Its scary that you have so much faith in your politicians!) The only thing I assume about STRATFOR is that they are thinking along the same lines(if the shoe fits)…whether they are right on any particular point is another matter.

Sun, 09/04/2011 - 16:59 | 1632095 PY-129-20
PY-129-20's picture

No, I don't have much faith in them. I just don't think that all of them intend Germany to be the controlling power in Europe. I don't totally disagree with you. Certainly there are politicians (scoundrels) that may see this as a chance. Maybe career politicians - like von der Leyen or Schäuble. But they are both not popular in Germany. Many see them as a threat to democracy.

In fact, I despise most of our politicians. It is not different here than basically everywhere else. Most people are disappointed and frustrated about politics. They don't feel that they are representated by the politicians anymore. Now the cynic in us might remind us that this was never really the case. But here in Germany I feel that we are at a point were things need to change - our constitution was ripped apart. As explained in another thread - this constitution was somewhat sacred - given the experience and the outcome of WWII.

I just wanted to say this as a German, because I see these discussions in my country every day. The outcome of that war has changed our national psyche completely. Many Germans are strictly against any military engagement - not in the Kosovo, not in Afghanistan, clearly not in Iraq or in Libya. And you may criticize that attitude. But you need to keep in mind that basically not long ago everyone was happy about that. Never again. Niemals wieder. That was the slogan. No German troops on foreign soil. You know - it is somewhat ironic that the Greens started the first war after WWII. A party that always consisted of pacifists. It also shows how shameless politics is.

They always wanted to be the sidekick of France - important, but not leading the show. And now everyone is demanding answers and solutions by them. They don't have any.

I am glad to be just an ordinary German as you put it. These are difficult times. And I see our democratic rights taken away by people like Schäuble. As a citizen I will do my duty and there is a very high probability that you will see me in the coming months on the streets fighting for more democracy. I have a feeling that it will be not different in other countries around the globe.

Ordinary people - like Christmas 1914. That's the real shame about all wars.

Sun, 09/04/2011 - 09:18 | 1631197 Léonard
Léonard's picture

Next up for Germany is an unholy alliance with the Russians. The best thing Europe can do is to part from the Germans while they still have a clean shot.

Germany will never separate from Europe nor will Europe separate from Germany. What Americans fail to understand is that Europeans are tied with a long time common history and unique common cultural backgrounds. We are talking about several milleniums old nations overhere, not about a 200 years old immature country build on Ponzi schemes and bases on a throwaway society.

What you will see is Europe kicking the American puppets out of the offices and turning its back on the Anglo-american world, then making alliance with Russia and Asia. The partisans of sovereignty and the European nationalists are already working on that.

Sun, 09/04/2011 - 13:12 | 1631520 trav7777
trav7777's picture

the nations there are not several millennia old, you idiot

Sat, 09/03/2011 - 15:21 | 1629827 JLee2027
JLee2027's picture

Time to stock up on food and ammo for the winter?

Sat, 09/03/2011 - 15:24 | 1629833 cossack55
cossack55's picture

Best move quickly. The nimble always survive.

Sat, 09/03/2011 - 15:54 | 1629876 Jasper M
Jasper M's picture


The savannah of Africa is littered with the bones of the nimble. There's a Lot more to survival than speed and reaction time. 

Sat, 09/03/2011 - 16:10 | 1629898 cossack55
cossack55's picture

Hmmmmmm.........please insert usually for always. Thanks.

Sat, 09/03/2011 - 20:54 | 1630425 flacon
flacon's picture

Just don't be at the back of the pack. 

Sat, 09/03/2011 - 15:23 | 1629832 cossack55
cossack55's picture

Has anyone seen Greek officials pow-wowing with any Icelandic types lately?

Sat, 09/03/2011 - 15:25 | 1629835 Bam_Man
Bam_Man's picture

Well, the Greek one year is yielding SEVENTY PERCENT. "Hard default" within a year is not a bold prediction. More like stating the obvious.

Sat, 09/03/2011 - 16:23 | 1629917 oogs66
oogs66's picture

Zh was one of few places that pointed out Greece 1 year price on Friday. Right before a leg down for stocks.

Sat, 09/03/2011 - 15:29 | 1629843 hungarianboy
hungarianboy's picture

Back to fukushima. WTF is this about?



Sat, 09/03/2011 - 16:05 | 1629891 pain_and_soros
pain_and_soros's picture

Beyond Konichiwa, my Japanese is quite limited, but in universal sign language, it looked to me like he was giving a finger to the cameraman.

Sat, 09/03/2011 - 18:11 | 1630133's picture

I think that guy is maybe seing one of those double rainbows or something.

Sat, 09/03/2011 - 18:33 | 1630198 jm
jm's picture

I want what he was smoking.

Sat, 09/03/2011 - 23:09 | 1630610 B-rock
B-rock's picture

That's the new planking. Radioactive pointing.

Sat, 09/03/2011 - 15:42 | 1629846 moonstears
moonstears's picture

Eventually Greeks must go, and others as the EU must get down to 10. I once read John's opus, known as Revelations, Ch 17 to be exact.

Sat, 09/03/2011 - 16:05 | 1629889 DeadFred
DeadFred's picture

But if half the toes are clay you need to keep the P I I G S right? Don't get too hung up on the literal numbers where symbolism is involved. 

Sat, 09/03/2011 - 22:13 | 1630537 Spitzer
Spitzer's picture

Greece can easily default its way out of debt and still get competative. They will just have lower Euro denominated incomes.

Sat, 09/03/2011 - 15:33 | 1629848 Sudden Debt
Sudden Debt's picture

I do think everybody knows where this is going to.

The more austerity and the more debt the faster the downfall. Europe had one chance to stop this default and that was a masterplan for the south.

Bring industry to greece but not at current wages.

Also there does need to be a austerity but only in the wages of the government employees, and only in fase 2 should they start firing them and sending them to that new industry.

That are a lot of "if's" and they didn't happen. It's to late now.

Now the same for Spain. They'll blow it. But if they did it, they could save Spain. A bit the same kind of plan that was used for eastern Europe but with 5 times the speed.


Sat, 09/03/2011 - 15:58 | 1629883 swissaustrian
swissaustrian's picture

Spain can´t be compared to Greece imo. Their debt/gdp is lower than Germany´s

Sat, 09/03/2011 - 16:38 | 1629941 ShoeShineBoy
ShoeShineBoy's picture

that might very well be true in and out of itself, but one only needs to look into the bubble of the bubbles housing market, insufficient loan losss reserves of banks and said banks' funding needs, yet alone i dont even want to mention the dire states of cajas... So, you sure, you still want to compare Germany to Spain..?

Sat, 09/03/2011 - 17:01 | 1629974 swissaustrian
swissaustrian's picture

Do you really think that Germany´s banking sector is better off?

Deutsche Bank has the 2nd lowest TCE of all big banks in Europe.

Commerzbank is already partially nationalized.

HRE is a bad bank.

Several state banks ("Landesbanken") are also zombies.

Sat, 09/03/2011 - 17:02 | 1629989 ShoeShineBoy
ShoeShineBoy's picture

I see your point but still i do.. Yes DB's assets/German GDP is high etc, but DB is a global bank, assets held in UK, Germany, US, Japan, etc.. SO, ho much of toxic stuff in Germany is big question.. DB has good earning power as well. Commerzbank and HRE not that much and Landesbanks, what a pain to Germany.. Yet, there was not any bubble whatsoever in Germany.


However, never forget, other than BBVA and SANTAN, even their SPanish books and fundings are questionable, all the other banks are "mostly" local in SPain and they still have looooong way to go to clean up and mark to market those fancy Spanish beach houses which are currently occupied none other than ghosts..  Their TCEs? well, if you mark them to reality, you will see. I am sure Spainish government will try to pull another IPO rabbit funded.underwritten by said Spanish banks  like Cajas, but mr. market is lurking on the sideline waiting to be done with Italy, before Spain..

Sat, 09/03/2011 - 17:10 | 1630003 Highrev
Highrev's picture

Spain is working on a Balanced Budget Constitutional Amendment (just to give you an 101 introductory example as to the differences).

Two very different social groups playing two very different games (one of which is for keeps and the other for handouts for as long as they're dumb enough to give).



Sat, 09/03/2011 - 17:15 | 1630013 knukles
knukles's picture

Yeah, but the Spanish speak Puerto Rican.

Sat, 09/03/2011 - 18:16 | 1630144's picture

That ought to be good PR.

Sat, 09/03/2011 - 15:34 | 1629849 falak pema
falak pema's picture

I think that ZH loves the doomers and gloomers who stoke the fire of 'we'll all be dead in four years' scenario...Greece will survive its melt down. They have a maze in Knossos, its five thousand years old...

Sat, 09/03/2011 - 15:43 | 1629867 Atomizer
Atomizer's picture

Anyone can survive when someone can receive free handouts. Who will give aunt Greece enough to pay her September credit card debt. If no one gives auntie any money, will she survive?

Sat, 09/03/2011 - 16:17 | 1629906 Waffen
Waffen's picture

No you have it wrong my friend, we wont "all be dead in four years."

Sat, 09/03/2011 - 17:05 | 1629997 ViewfromUnderth...
ViewfromUndertheBridge's picture

let's see if CSFB and UBS can find their way out of that maze...which was the point of the article. Oh the contagion! 

Sat, 09/03/2011 - 21:05 | 1630440 papaswamp
papaswamp's picture

Yea and there are mayan ruins...they didn't fair so well. remaining ruins are not an indication of survival...merely a record of existance...kind of like fossils.

Sun, 09/04/2011 - 09:33 | 1631209 Mec-sick-o
Mec-sick-o's picture

There are currently 7 million mayan people, spread in the ancient Mayan Territories.

Perhaps very poor, but alive.

Sun, 09/04/2011 - 03:45 | 1631031 oldman
oldman's picture

Hey Falak

thanks for saying this----I could never buy the bible stories when I was ten years old, but it is boring to read the madness these suvivalists(as they call themselves eith bible in hand) write. 2012 will come and we will buy new calendars just like in 2k. Besides, preparation is not the same as survival---they will kill each other off anyway---too many differences between them----too much hatred in their hearts. On some nights they are exhausting for an oldman

 thanks again             om                                   

Sat, 09/03/2011 - 15:36 | 1629850 Atomizer
Atomizer's picture

It's a recession when your neighbor loses his job; it's a depression when you lose your own.

-Truman, Harry S


Cannot wait to hear our dear president tell the new politically correct vision on jump starting a insolvent country.


Exhibit A - Taxpayer Funded


Evergreen Solar took stimulus money
Now it moves 800 jobs overseas


Evergreen Creditors Fight Plan for Auction, Move to China


Exhibit B - Taxpayer on the hook in the tune of 535 million ++, DOE/OMB have been caught in fraud.

Solyndra goes bankrupt, sheds 1,100 jobs


What was Friday's job numbers? Two taxpayer funded "Green Job" plans went belly up. More lost tax revenues compromised with new government unemployment handouts. The progressive better start to threaten the SS Ponzi recipients that this administration is going to hold back their paycheck if they don't conform with the new US austerity plans.




It the 1800's, the white hats would ride into a town on horseback and gun down the thieves. Justice would be restored until the next set of villains cropped up. Wash, rinse and repeat.



Sat, 09/03/2011 - 16:01 | 1629887 Ying-Yang
Ying-Yang's picture

Speaking of Solar..... does anyone miss Ol' Leo?

Sat, 09/03/2011 - 16:34 | 1629937 Gordon Freeman
Gordon Freeman's picture

If Leo the Shit-Headed Hypocrite never came back to ZH, it would be too soon!

Sat, 09/03/2011 - 19:56 | 1630351 Bicycle Repairman
Bicycle Repairman's picture

"The progressive better start to threaten the SS Ponzi recipients that this administration is going to hold back their paycheck if they don't conform with the new US austerity plans."

That being the case then the "progressive", the administration and the congress had best start packing  their bags.  Their public service is ending.

Sun, 09/04/2011 - 11:38 | 1631358 LawsofPhysics
LawsofPhysics's picture

All this talk of jobs is pointless when there are no CUSTOMERS.

Sat, 09/03/2011 - 15:34 | 1629851 Lord Welligton
Lord Welligton's picture

If they go for a hard default there is no point in them pretending they can repay anything more than 25% of the debt.

And they would only do that if further loans were available to transition to a zero budget deficit.


Sat, 09/03/2011 - 16:49 | 1629959 ShoeShineBoy
ShoeShineBoy's picture

 i guess you are assuming Greece staying in EU still pundering EUR... more platable situation might be to leave EUR but even then no one knows how they are going to handle EUR liabilities of Greek banks, corps, deposits/wealth of its populace, alas 2001 Argentina.. 

Sat, 09/03/2011 - 16:57 | 1629983 Lord Welligton
Lord Welligton's picture

If they go hard default without any support all of the Greek banks are immediately insolvent (not that they aren't already).

The European, not just the Euro, banks all hit a brick wall at the same time.

If Greece is kicked out of the Euro or abandoned by the ECB and the EU it truly is game over for the Euro and in short order the EU.

Sat, 09/03/2011 - 17:11 | 1630009 Mister Ponzi
Mister Ponzi's picture

The treaties are not very clearly formulated but the current interpretation is that if Greece leaves the Euro it *HAS TO* leave the EU as well. That does not sound like a sensible arrangement as there are ten EU memberstates that do not use the Euro, but nevertheless that's the way it is. Therefore, the fate of the Euro and the EU are indeed closely intertwined.

Sat, 09/03/2011 - 17:18 | 1630020 Lord Welligton
Lord Welligton's picture

I think I disagree on your interpretation of the treaties, formulated as an EU Constitution via Lisbon.

However our disagreement would be academic.

If Greece goes hard default Rumpey and Barroso can use the Lisbon treaty to wipe their arses after they shit themselves.

Sat, 09/03/2011 - 17:31 | 1630049 Mister Ponzi
Mister Ponzi's picture

Well, it's not my interpretation, it is what you hear from European thinktanks. But I agree that this discussion has no practical meaning. If Greece decides to leave the Euro we would see an immediate run on their banks by depositors which would probably lead to runs at least in Ireland and Portugal. With the PIIGS banking systems blowing up it will be indeed game over.

Sat, 09/03/2011 - 18:10 | 1630130 Lord Welligton
Lord Welligton's picture

A run on the banks in this "Post Modern Fiat System" occurs when the people are asleep.

By the time they get to the bank to "get their money" they will find two things.

1. It is a bank holiday.

2. Only 5% of the money supply is notes and coin. The rest is in the imagination of Central Bankers.

Sun, 09/04/2011 - 09:02 | 1631184 Mister Ponzi
Mister Ponzi's picture

In general, you are right, but if depositors know that their deposits will be converted into a much weaker currency (and most likely at a highly unfavorable rate, you will also see mass withdrawals of deposits.

Sun, 09/04/2011 - 09:10 | 1631191 Lord Welligton
Lord Welligton's picture

It will be interesting to see how markets trade on Monday.

I suspect massive back-door shenanigans by the Central Banks of Europe.

I do however think the Ponzi is becoming unglued.

Sun, 09/04/2011 - 09:20 | 1631198 Lord Welligton
Lord Welligton's picture

The EU should continue with your financial support to Greece, but on condition that they step out of the euro.

Read more:

Interesting stuff.

Sat, 09/03/2011 - 22:52 | 1630585 dogbreath
dogbreath's picture


You say that like there is somthing wrong with that..  What worries me now is the solution to the problem 6 chess moves ahead

Sat, 09/03/2011 - 20:20 | 1630380 CrashisOptimistic
CrashisOptimistic's picture

The popular thing to presume is Greece leaves the EU, prints drachmas and carries on.

It's much worse than that.  They have to buy oil and no oil producer will sell it for drachmas.  

The way this goes is Greece goes to budget deficit 0 overnight.  Major schock effect.  Some huge number of government employees will be fired.  Pensions won't be paid.  Oil won't be shipped into the country because it can't be paid for.

Then the shortages arrive.  And so does the Red Cross.  

Then the rest of the countries fold, too.

Sun, 09/04/2011 - 07:55 | 1631136 StychoKiller
StychoKiller's picture

Greece better hang on to their Gold reserves, then!

Sat, 09/03/2011 - 15:38 | 1629852 Mister Ponzi
Mister Ponzi's picture

I wonder whether a hard default in Greece would cause politicians in Portugal and especially Ireland to retreat from their bailouts. Ireland should have followed the Icelandic example and just let their banks go bust - instead they were bullied into ruining their own balance sheet by this Maoist student group leader and the abysmal Haiku poet of the Politburo of the EUSSR. Maybe Greek pulling out of the Euro will cause the other bailouts to unravel as well. I should check this bottle of single malt for the Monday showdown...

Sat, 09/03/2011 - 16:49 | 1629962 Lord Welligton
Lord Welligton's picture

If Greece goes hard default it is game over no matter what the politicos want.

Unless there is a credible narrative before Monday the banking system will freeze up.

By which I mean no inter-bank lending.

After that things would happen at a speed which the Euro politicos simply cannot handle.

The most astonishing thing to me is that the IMF walked out of Greece.

They should have stayed and mumbled something about it being tough but doable.

They have now made it look as if Greece will default in the very near future.

Where is the Greek government comment on this.

They are remarkably silent.

This could all happen in nano seconds.

Gold to $2,500 by the end of the week unless somebody gets a grip.

Sat, 09/03/2011 - 17:15 | 1630014 Highrev
Highrev's picture

Separately, senior FDP official Hermann Otto Solms, a vice-president of the Bundestag and an economy committee member in parliament said since Greece could not handle its debt problem and it should consider leaving the euro.

Sticking a fork in Greece would be the best thing that could ever happen to the Euro. It would be the best shot in the arm that Euro credibility could ever get . . . along with some serious action on the part of the remaining members . . . but with what we're seeing in Spain and Portugal, maybe Italy and Ireland just might get their butts in gear (not to mention what the Greece "example" would do for their motivation).

Sat, 09/03/2011 - 17:23 | 1630028 Lord Welligton
Lord Welligton's picture

Sorry. I disagree.

I think you fail to see the interconnectedness (long word) of it all.

The European banking system would freeze in a second.

Irish and Portuguese debt would go bid-less and the ECB would be forced to balloon its balance sheet to mop up for Spain and Italy.

A Greek "example" would do nothing for the credibility of the Euro or the EU.

Greece itself would become a violent mess which would quickly spread to the rest of Europe.

Sat, 09/03/2011 - 17:30 | 1630046 topcallingtroll
topcallingtroll's picture


But then governments have to live within their means if bonds go bidless. What is wrong with that? Sure there will be some suffering but so what? It will be worth it to end this cradle to grave nanny-ism that has infected so many fine minds.

Sat, 09/03/2011 - 17:39 | 1630067 Lord Welligton
Lord Welligton's picture

I don't disagree that that Neo-Keynesianism is ultimately doomed.

However it is the transition to balanced budgets and sound money that is important.

All to easily the shock of immediate adjustment could result in widespread conflict.

I don't think anyone wants that.

Sun, 09/04/2011 - 01:11 | 1630737 CompassionateFascist
CompassionateFascist's picture

Think again. Chaos is the ultimate Creative. During an Age of Chaos, all sorts of problems get solved. I'm thinking of one in particular.

Sat, 09/03/2011 - 17:31 | 1630051 Highrev
Highrev's picture

Your assumption is that the rest of the PIIGS choose the same path to travel.

Mine is the contrary.

Two possibilities. Honest, objective people can analyze the data (which includes social trends as well as hard numbers and everything in between) and propose probabilities. The debate is certainly on (and next week we'll see more on how that works out in prices) and maybe for some time. We shall see.

Sat, 09/03/2011 - 17:25 | 1630033 Lord Welligton
Lord Welligton's picture

Oh. Forgot to mention.

Italy has to roll-over €60bn in September.

And Burlesconi has gone gaga.

Who's going to take up the slack?

Sat, 09/03/2011 - 20:09 | 1630365 BungaBunga
BungaBunga's picture

I asked my friends from Sicily to pay their taxes, so forget about it.

In the mean time the Bunga Bunga parties will be held in Milan.

Sat, 09/03/2011 - 20:26 | 1630392 CrashisOptimistic
CrashisOptimistic's picture

There's a pretty good chance it would cost the EU the same amount for refugee food and housing as winter approaches as it would to bailout.

This is not some barren African hole.  This is European citizens in Athens who will be shown starving on TV each night all over Europe.  You don't think checks will be written for that?

As soon as Greece is unable to fund oil for trucks delivering food, the Red Cross will be on its way.

Sat, 09/03/2011 - 21:14 | 1630457 papaswamp
papaswamp's picture

..or panic will rule and spread like wild fire as citizens rush to cross borders into other countries. Concentrations of population tends to panic much easier than remote or spread out groups.

Sat, 09/03/2011 - 22:57 | 1630593 trav7777
trav7777's picture

JFC...did Brazil or Argentina or Iceland have that?  Colombia?  I have been to most of these countries RECENTLY.  I just got back from Iceland.  Nobody is starving for fuck's sake.  Life was a little harder for them now than it used to be, so they all get drunk at home and then hit the clubs instead of drinking at the joint.

This shit is JUST JEW CONFETTI.  It needn't control your life.

Sun, 09/04/2011 - 01:15 | 1630747 CrashisOptimistic
CrashisOptimistic's picture

Iceland is a food exporter and paid for oil that way to get that food to the shelves.

Argentina did indeed have mass starvation last decade.


Sun, 09/04/2011 - 02:05 | 1630836 IQ 145
IQ 145's picture

I'm sure they can "depend on the kindness of strangers".

Sat, 09/03/2011 - 17:25 | 1630034 ShoeShineBoy
ShoeShineBoy's picture

 I still believe the best thing that can happen to EU is to seperate the northerners with a new currency (i know the ramification w.r.t. exports, competitiveness, labor costs, etc. etc. etc.) but still for the populace of PIIGS + France, relatively small northerners should take a walk.. And play with their newly found wealth while worrying about the jobs, later..  Regardless, gold would still continue its destinations towards 10K+, either way..

Sat, 09/03/2011 - 17:29 | 1630041 Lord Welligton
Lord Welligton's picture

You could be right.

But if you are someone better have a Plan B ready to go. If not it will be a chaotic adjustment.

What should happen and what will happen are two different things.

Sat, 09/03/2011 - 17:34 | 1630057 ShoeShineBoy
ShoeShineBoy's picture

 it is relatively easier to put into a plan as it mostly takes ECB to warm up printers whilst Bundesbank getting ready for their own swap along with a few journal entries on corps/banks, etc.. Some will loose for sure, but still.."relatively" easier than most other options.

Sat, 09/03/2011 - 17:43 | 1630076 Lord Welligton
Lord Welligton's picture

Except that the ECBs declared position is that they will not "print".

The EU as a political creature is not fit for purpose.

Yes I agree the ECB should create about €2 Trillion.

It should be used to break up the banking monopoly on the provision of credit and to separate gambling from banking.

But I honestly do not think that is going to happen.

Sat, 09/03/2011 - 17:27 | 1630036 topcallingtroll
topcallingtroll's picture

I agree a greek example will motivate them. It may motivate everyone.
It will be fun to watch a greek collapse. It will be horrific. Probably require a military dictatorship to stabilize the smoking ruins.

I love the smell of socialism dying in the morning.

Sat, 09/03/2011 - 17:35 | 1630058 Highrev
Highrev's picture

Naw. Just a huge devaluation and a tremendous hit to Greek living standards, but hey, the silver lining is that their tourism would surge overnight.

Right back where they started.

Nothing lost and nothing gained.

Sun, 09/04/2011 - 21:24 | 1631071 Judge Holden
Judge Holden's picture

You are appropriately named.



Sat, 09/03/2011 - 17:34 | 1630055 topcallingtroll
topcallingtroll's picture

This is greece playing hardball and the IMF calling their bluff.

The asians are watching to see if the imf has a double standard. The imf is aware of that.

It is possible that greece may capitulate, but the imf wont, come hell or high water.

Sat, 09/03/2011 - 18:39 | 1630210 Quicksilver
Quicksilver's picture

The most astonishing thing to me is that the IMF walked out of Greece

I think they, like S&P for the US downgrade, are sticking to a script. And like S&P it could be in order to put the fear into those who think they make decisions. Alternatively it could be that it's time to bring down the Euro to make way for something more far-reaching in scope.

Sat, 09/03/2011 - 21:02 | 1630438 Lord Welligton
Lord Welligton's picture

You spotted my astonishment.

And I am astonished.


If someone wanted to cause shit. They just did it.


They, the IMF, EU and ECB (Troika) could have kept stum.


They chose to make an issue of it.


I don’t think it was the IMF.


I think it was the EU/ECB.


They are to put it politely. Dickheads.


They think with the big hard-on that they have for the Euro-Empire.


You say "sticking to script".


I’m not sure there is one.


It is far too chaotic to be scripted.


The truth is the IMF would not have walked out on Greece.


They would have made a deal.


What really astounds me is this.


Why are the IMF there in the first place?


Why cannot the great European “Project” handle its own shit?


Mon, 09/05/2011 - 05:26 | 1633654 janus
janus's picture

couldn't agree more.

heads up, bitchez!  wellington rules this post!

but i'll get back to business on tuesday; and will at that point think again about finance.

till then:

Lord Wellington, can I expect your support for Jerry's Kids?

I will consider it a personal favor; and will repay it in kind; as a gentleman, I will honor whatever request you make when you call upon my services.



Mon, 09/05/2011 - 08:06 | 1633732 Lord Welligton
Lord Welligton's picture


How many kids has Jerry.

Come to think of it. Who is Jerry?


Sat, 09/03/2011 - 15:35 | 1629853 camoes
camoes's picture

game over. thanks for playing. continue? insert a 1 trillion platinum coin to play. 9,8,7,6,5,4,3,2,1 YOU LOSE

Sat, 09/03/2011 - 16:59 | 1629986 Lord Welligton
Lord Welligton's picture

Succinctly put.

Someone has got to ante up to save the Euro.

But they've tied themselves in so many Gordian knots now it is difficult to see what they can do.

Sat, 09/03/2011 - 15:40 | 1629861 mikmid
mikmid's picture

Sleeding through the snow

On a dead horse euro sledge

Over the cliff we go

screaming all the way

Oh what fun we'll have

With our bullion stashed awaaaaaaay.

Sat, 09/03/2011 - 16:24 | 1629919 Lazlo Toth
Lazlo Toth's picture

+ Saint Nick

I saw Hot Cocoa and the Apocalypse all in one sleigh. Whoa.

Sat, 09/03/2011 - 15:51 | 1629873 pain_and_soros
pain_and_soros's picture

Well if the Swiss banks go under, the Swiss government can simply print money to bail them out & thus finally devalue the Franc - which has been stubbornly high of late.

no need to intervene in the foreign exchange markets & sell francs, no need to talk about pegging to the euro...

problem solved!


Sat, 09/03/2011 - 15:56 | 1629879 swissaustrian
swissaustrian's picture

One thing is for sure: they will bail them out if necessary. The parliament tries to impose new "too big to fail" rules right now.

My hope is that they´ll split them into a healthy commerical bank and a bad investment bank. Maybe add a separate real estate division. UBS is one of the biggest owners of swiss real estate. Their property is estimated arround 100 billion CHF.

Sat, 09/03/2011 - 16:25 | 1629923 CrashisOptimistic
CrashisOptimistic's picture

Governments will do ANYTHING to keep it all going.  If that means confiscate your gold, they will confiscate your gold.  If that means bulldoze every foreclosure in the US and bill the cost to banks, they will do that.  If it means frame the head of the IMF to get him out of power before he allows default, they will do that.

And if that means hire assassins and have them kill anyone they think needs killing they will do that.

They will do anything to keep the ball rolling.

Sat, 09/03/2011 - 17:20 | 1630024 Highrev
Highrev's picture

No-one's going under. Hell, these folks are wicked, but they're not stupid.

They've had over 2 years to rebalance their portfolios appropriately. THEY'VE BEEN BAILED OUT!

There will be haircuts of course. The German banks will take the biggest hit, but Germany can handle that (politically as well since a domestic bailout is an easier sell than sending the money to some freeloading Greeks).

Sun, 09/04/2011 - 01:18 | 1630749 CompassionateFascist
CompassionateFascist's picture

All of human history argues against you. TPTB have always been Wicked...and Stupid. Call it entropy. Differential outcomes are explained by the fact that some are stupider than others.

Sat, 09/03/2011 - 15:53 | 1629877 swissaustrian
swissaustrian's picture

Tyler, The exposure of Swiss banks towards Greece is minimal.

It´s their exposure towards Italy

Sat, 09/03/2011 - 16:00 | 1629886 bottomdrawer
bottomdrawer's picture

Greece is a parasite to modern society...this only proves it in monetary terms .

Sat, 09/03/2011 - 16:13 | 1629903 Sequitur
Sequitur's picture

If Greece is a parasite, what does it mean for the U.S.A.?

Sat, 09/03/2011 - 16:24 | 1629920 bottomdrawer
bottomdrawer's picture

If the U.S.A. does not get serious about its financial matters...what is lower than a parasite in the food chain?

Sat, 09/03/2011 - 16:56 | 1629979 DaBernank
DaBernank's picture

Until US has to pay current Greek yields for its debt, it will continue on the path of USD devaluation. Low yields are a pavlovian response of a market that has always sought out US Treasuries as safe haven and will soon realize the essence of gold's appeal.

Sat, 09/03/2011 - 17:21 | 1630025 topcallingtroll
topcallingtroll's picture

Deficits without tears, bitchez!

American exceptionalism at its finest.

Who says there aint no free lunch?

Sun, 09/04/2011 - 10:15 | 1631249 hedgeless_horseman
hedgeless_horseman's picture

Who says there aint no free lunch?

The list is short, but distinguished extinguished: Gaddhafi and Hussein.  

Mon, 09/05/2011 - 05:31 | 1633656 janus
janus's picture


as one who reads and follows your thoughts, i'm well aware that you have a heart for the less fortunate.  Can Jerry's Kids count on you today?

the state of alabama thanks you for your recent efforts.

Please renew a similar spirit in this regard.  people listen to, and above all respect, you.

humbly pleading,


Sat, 09/03/2011 - 16:57 | 1629981 swissaustrian
swissaustrian's picture


Sat, 09/03/2011 - 17:21 | 1630026 Highrev
Highrev's picture

The U.S. moves front and center (even ahead of Japan).

Sat, 09/03/2011 - 17:15 | 1630017 Seer
Seer's picture

Whale shit.

Next question?

Sun, 09/04/2011 - 01:02 | 1630726 PeterB
PeterB's picture

I believe you cannot get any lower than a footprint!

Sat, 09/03/2011 - 16:16 | 1629905 pain_and_soros
pain_and_soros's picture

i think the degree of corruption in Greece & Italy (among other places) & the acceptance of/indifference to it by their respective populaces is what separates these countries & made them poor credit risks.

But this was all forseeable since Greece & Italy governments are simply doing what they did before they joined the Euro - the only thing that changed with the Euro was they had access to more credit at lower rates.

If you are a German taxpayer, do you feel better about bailing out greedy German banks who stupidly lent to these countries or bailing out the PIGS so they continue their corrupt ways as before???  Not much of a choice.


Sat, 09/03/2011 - 17:19 | 1630023 topcallingtroll
topcallingtroll's picture

How about no more bailouts for anyone?

The industrious and thrifty resent being treated as chumps by the lazy and entitled. It can never work. Feudalism was the most stable and longest lived system.

Let the new feudalism begin!

Sun, 09/04/2011 - 01:05 | 1630731 disabledvet
disabledvet's picture

"confidence" is defined not by throwing money at something but what happens when the people who get the money do something with it. Indeed.

Sat, 09/03/2011 - 18:18 | 1630154 Lord Welligton
Lord Welligton's picture

Sorry Dude.

That is just plain old horseshit.

"modern society".

WTF is that?

Sat, 09/03/2011 - 18:29 | 1630185 Yen Cross
Yen Cross's picture

Great post. A possible Quaker? Never know...

Sat, 09/03/2011 - 19:53 | 1630199 Lord Welligton
Lord Welligton's picture

No not a Quaker.

An outsider.

But maybe they are too.

"to tremble in the way of the Lord."

Sat, 09/03/2011 - 16:02 | 1629888 GoldenPath
GoldenPath's picture

Contagion bitchez!

Sat, 09/03/2011 - 18:19 | 1630155 Lord Welligton
Lord Welligton's picture

Succinctly put.

Sat, 09/03/2011 - 16:09 | 1629890 Atomizer
Atomizer's picture

But wait, if you order in the next ten minutes.. You'll receive a new liquidity plan guaranteed to generate capital out of thin air. LOL.

Liquidity, Bank Capital and Market Reform

LB was a ZH poster back in the early blog days. Thought I would share his latest.

Sat, 09/03/2011 - 18:23 | 1630174 Kimo
Kimo's picture

Thanks for the link, Atomizer, it's rare that I find one worth bookmarking anymore.

"Some will say that the Greeks are hard line communists pining for generous state benefits and pensions they haven't earned. Maybe so. But there is more economic justice in such a system with such objectives determined in a democratic process than in any system with a secret primary imperative to Protect the Bondholders."

Sat, 09/03/2011 - 18:30 | 1630188 Lord Welligton
Lord Welligton's picture

Thanks for that.


Sat, 09/03/2011 - 22:04 | 1630525 tom a taxpayer
tom a taxpayer's picture

Atomizer - Thanks for the link. Excellent analysis on liquidity. LondonBanker is great.

Sun, 09/04/2011 - 17:22 | 1632173 London Banker
London Banker's picture

@ Atomizer

Thanks for linking and glad you liked the post.  I don't post as frequently as I once did, but I work harder at the coal face of reform these days.  LB

Sun, 09/04/2011 - 17:22 | 1632174 London Banker
London Banker's picture

@ Atomizer

Thanks for linking and glad you liked the post.  I don't post as frequently as I once did, but I work harder at the coal face of reform these days.  LB

Sat, 09/03/2011 - 16:06 | 1629893 sasebo
sasebo's picture

But, whats going to happen to all the greedy asshole bankers & fat cat investors that were trying to get rich by printing paper money & lending it to Greece? The ECB going to print them some new paper money? What are they going to buy with that paper money? More debt?   

Sun, 09/04/2011 - 02:21 | 1630879 IQ 145
IQ 145's picture

"What are they going to buy with that paper money?"  Less than they bought with the last batch; I just love easy questions.

Sat, 09/03/2011 - 16:08 | 1629894 ben_bernanke
ben_bernanke's picture

Why did the TED spread fall on Friday? I don't understand where any credit risk is baked in at this point. The markets themselves are ignoring this, probably because it doesn't matter.

Sat, 09/03/2011 - 16:08 | 1629896 digalert
digalert's picture


It's all Greek to me...

Sat, 09/03/2011 - 16:12 | 1629897 RobotTrader
RobotTrader's picture



Somehow, some way, the system will survive a Greek default.

Wash/Rinse/Repeat as usual.

Old regimes will crash, new PigMen will emerge and take over.

There are always Alpha-Dog Thugs running around wiling to pick up the pieces.

That is how fortunes are made.

Sat, 09/03/2011 - 16:48 | 1629940 Atomizer
Atomizer's picture

I admire such strong optimism. RobotTrader, all of your stock profits will be frozen/transferred to aid in the EU restructure program. Alpha-Dogs like myself indulge in your generosity to assist in the rebuilding of failed monetary societies. You have set the ZH mark in defining how important wealth redistribution has become & we welcome your positive soundboard efforts in convincing all mankind to help. During your pilgrimage. I can only ask that each disciple you convert must receive a small gift in token. see below

Wealth Redistribution- Everyone Wins the Game



Sat, 09/03/2011 - 16:49 | 1629963 Piranhanoia
Piranhanoia's picture

Something is wrong, robo isn't touting a rich, delicate tasting turd.  Maybe a word cloud sentence creator to make it look human when on vacation?

Sat, 09/03/2011 - 17:02 | 1629991 topcallingtroll
topcallingtroll's picture


Yeah if I get lucky say hello to your new alpha dog, you peons.

The troll will be just but merciful in the new feudalism. But you peons are gonna have to work hard for your gruel. You will not starve. My estates will always have gruel, even coffee for my best workers.

Sat, 09/03/2011 - 17:16 | 1630018 swissaustrian
swissaustrian's picture

The observation is right, Merkel uses this crisis to centralize economic policies. But she didn´t engineer the crisis.

That´s a conspiracy theory. The British always blame the Germans.

Sat, 09/03/2011 - 23:33 | 1629901 navy62802
navy62802's picture

I say again. Markets have not bottomed. You just gotta give it time. They still have a long way to go before they bottom.

Sat, 09/03/2011 - 16:16 | 1629904 how to trade ar...
how to trade armageddon's picture

The WSJ also had this great quote from an unnamed Greek cabinet minister, which I posted earlier to another thread:

// The Greek government is saying that the country has taken about as much austerity as it can stand.

“It’s killing us,” says one Greek cabinet minister.

Athens can’t force through another round cuts to pay pensions and social services: “An angry population will take matters into its own hands, the government will collapse and we may end up with political crisis in a near-bankrupt euro-zone country which nobody will know how to control. //

One very crucial point to keep in mind is the conflict between Greece's official and private creditors. To complete this bond swap, Greece needs to put up about 30 billion euros of collateral. That can only come from Greece's official creditors. Imagine you're a creditor to a company clearly heading to bankruptcy. Do you want to lend it another 30 billion, that you know other creditors will just take right out, right on the eve of the bankruptcy filing?

I'm working on my own piece about this. But for now, suffice it to say that, especially if you've got access to European markets and you're willing to be up bear trading at 3am Monday morning, this should be a very profitable week.

Sat, 09/03/2011 - 16:26 | 1629925 Sequitur
Sequitur's picture

Already got my Italy short in weeks ago. As in, shorting the entire Italian stock market.

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