The first rule of media (especially when dealing with an idiot audience that has a 7 second attention span): when all else fails, redirect. That's precisely what Eurogroup president, and certified, sanctimonious, pompous liar, Jean-Claude Juncker just did today, as it is becoming increasingly clear that nobody in Europe has any clue just what the Greek bailout #2 will look like now that the ECB and Germany are at polar opposites on how to proceed, the ECB thinks it is a rating agency and can dictate what an Event of Default is, and German bankers are willing to cede to private involvement in the bailout, but in a way that is voluntary. The problem is that these three are very much mutually exclusive. So what does Juncker go ahead and do - he redirects to highlighting the problems of the US: "The debt level of the USA is disastrous," Mr. Juncker said. "The real problem is that no one can explain well why the euro zone is in the epicenter of a global financial challenge at a moment, at which the fundamental indicators of the euro zone are substantially better than those of the U.S. or Japanese economy." That may well be the defining moment: by now everyone knows that the global economy is a massive pyramid scheme. Yet to this point, those in control have at least kept their mouths shut. However, when in order to explain one's insolvency, those at the very top of the control pyramid have no other choice than to point out just how broke others are (when in reality it is all one big, interconnected, "globalized" and truly insolvent Ponzi), then the unwind has begin.
The WSJ explains the latest developments in Greece:
Highly indebted Greece needs a "soft, voluntary restructuring" of its debt, said Jean-Claude Juncker, the head of the group of countries using the euro as a common currency, in a radio interview Saturday.
Backing proposals by German Finance Minister Wolfgang Schäuble, Mr. Juncker told Inforadio Berlin Brandenburg that private lenders need to participate in a fresh aid program for Greece, but only on a voluntary basis.
Also, any such move has to be made in a way that credit ratings agencies don't interpret as a credit default, he said. And it needs to be done without the "danger of infecting" other euro-zone members.
That the proposal as set forth at this point is completely unworkable (as Zero Hedge predicted) apparently is irrelevant:
The euro group president didn't explain what exactly such a voluntary, soft restructuring should look like, but he said there won't be a full restructuring of Greek debt.
Finally German banks are starting to realize that the BS-factor of the latest "plan" is becoming more see thru than the clothing in Paris Hilton's latest MTV show.
Meanwhile, Michael Kemmer, head of Germany's BdB banking association, cautiously accepted the participation of private lenders in a rescheduling of Greek debt as proposed by Mr. Schäuble. But, in a radio interview Saturday to Deutschlandfunk broadcaster, he said such a move needs to be done in a voluntary way, so that credit rating agencies don't see it as a default and financial markets don't get unsettled. The BdB represents commercial banks such as Deutsche Bank AG and Commerzbank AG.
However, as Trichet indicated in his latest press sppearance, the ECB is now on a different page entirely:
Mr. Juncker called for an agreement with the European Central Bank on the issue. The ECB so far has rejected any kind of restructuring, be it a "haircut" on the principal of Greek sovereign bonds, or just an involvement of private lenders in an extension of Greek debt maturities via a bond swap, as Mr. Schäuble has suggested.
"We can't push through a private lender participation without and against the ECB," Mr. Juncker said.
In exchange for any fresh program, Greece needs to make sure it reaches its 2011 fiscal targets, Mr. Juncker added. "If Greek policies continue as they have in the first six months [of this year], then they won't reach the budget target," he said, adding that any additional aid would be linked to very strict conditions.
Also worth nothing, is that Juncker has finally learned that keeping silent is actually better than lying outright:
The euro group head declined to give a possible amount of fresh aid, but said figures circulating in the media were right.
Asked whether that could mean anything between €60 billion and €120 billion ($86 billion and $172 billion), Mr. Juncker said he doesn't believe that euro-zone countries will have to come up with such a sum.
Yet here is the punchline:
Not withstanding the euro zone's problems, Mr. Juncker said that both the deficit and overall debt in the U.S. and Japanese economy are substantially higher than in Europe.
"The debt level of the USA is disastrous," Mr. Juncker said. "The real problem is that no one can explain well why the euro zone is in the epicenter of a global financial challenge at a moment, at which the fundamental indicators of the euro zone are substantially better than those of the U.S. or Japanese economy."
Translated: "why are you picking on us?" and "Have you looked at the US and Japan recently?" Translated even more: the Nash equilibrium of the mutually assured avoidance of the topic of global insolvency is now broken. Next up: the US and Japan bash Europe and confirm that Europe's PIIGS are actually far risky than the US and Japan, plus they can't print their money etc. Then Europe retaliates. And so forth.
The blame game avalanche has officially started.