Dean Wormer to the PIIGS: “FAT, DRUNK and STUPID IS NO WAY TO GO THROUGH LIFE, SON”
The Greek debt situation continues to hold the world’s attention. When I first started publishing NOTES FROM UNDERGROUND back in November 2009, GREECE was the main issue from the moment the Chinese walked away from a Greek debt placement and the European sovereign bond markets began to reflect the great uncertainties of all the PIIGS. It has been a continued period of LIES and DECEPTION and the result has been to keep the global markets and the European Union on the continual abyss of self-destruction.
As the markets have been in turmoil,again, I cannot help but think that the GLOBAL FINANCIAL POWERS have finally realized that with U.S. growth slowing, China worried about inflation and Japan attempting to recover from a huge natural disaster, the EUROPEAN DEBT CRISIS NEEDS SOME FORM OF RESOLUTION. It amazes me how quiet Washington and its mouth pieces are with the credit and equity markets so roiled. If the G-20 and whatever other fraternities of power exist for a reason, now had better be the time to find its PURPOSE.
From the beginning of the crisis, many talking heads have opined that GREECE is a mere 3% of EU GDP and therefore of very little significance. The Wall Street shills were and have been wrong about the impact of the GREEK and other peripherals threat of economic contagion. Credit events are always messy affairs and none more so then those involving banks and central banks that have been hiding behind the veil of “MORAL HAZARD.” The continuous rise in the price of Greek 2-YEAR NOTES has been the “TELL” that the markets have used to alert the ECB and others that the Greek problem was far from resolved.
The EUROPEAN UNION’S DEBT CRISIS IS GLOBAL AND IT IS TIME TO DEAL WITH IT OR ENDURE THE IMPACT OF A LEHMANESQUE EVENT. THE ECB IS PREVENTING A HIT TO ITS OWN BALANCE SHEET AS IT OWNS GREEK, PORTUGUESE, AND IRISH DEBT AND IT IS TRYING TO PROTECT ITS ASSETS AND CREDIBILITY. WILL THE PRICE BE A CREDIT DEBACLE OR A GLOBAL PLAN TO BAILOUT THE FINANCIAL SYSTEM?
I am thinking that the quiet coming from Washington may mean that something is being planned and the late rally in the stocks and EURO means we have to be alert. The financial policy makers like to act as if THEY HAVE SAVED THE WORLD but from our concerns the trading opportunities will be in the details. Patience is needed. I don’t wish to write ad nauseam about Greece, so NOTES is publishing some earlier BLOGS about the PIIGS for unfortunately they are still relevant.
June 12, 2011: The Inflation Fears are Muted as a Renewed Threat of Deflation Appears on the Horizon
June 14, 2010: Greece Shakes; Spain Rattles; and German Government Threatens to Roll
March 25, 2010: Greece is the Word and It’s Getting Ancient
February 10, 2010: It’s All Greek 24/7 (Sorry About That)
Tags: 2-year notes, Animal House, EU GDP, Euro, European Debt Crisis, Greece, PIIGS
June 17, 2011 at 3:38 am |
The European Central Bank (ECB) (leverage 23.4 to 1) has capital and reserves of Euro81bn but includes in its assets Euro140bn of Greek Sovereign and Bank debt.
So in reality, the ECB is insolvent.
That is why the Eurozone is so reluctant to recognise the possibility of Greek default. It would take the ECB down with it.
Good report on the ECB at
http://www.openeurope.org.uk/research/ecbandtheeuro.pdf
June 17, 2011 at 5:37 am |
Silver–good point and thanks for being a positive add to the BLOG –much at stake here for so many–and as Disraeli warned ,,LIES,DAMNED LIES, and European Politicians with their statistics
June 19, 2011 at 6:52 am |
[…] Yra says, “Dean Wormer to the PIIGS: “FAT, DRUNK and STUPID IS NO WAY TO GO THROUGH LIFE, SON”” Moral: Don’t discount the Greece situation. Don’t be swayed by people saying the Greek economy isn’t big enough to matter. It matters. […]