“In many local communities, fountains are not switched on and flowers are not planted in the public parks because of a lack of money,” said Andreas Blätte, a political science professor at the University of Duisburg-Essen in the state of North Rhine-Westphalia, explaining why so many Germans oppose lending money to Greece.
Is A Greek Default Inevitable?
No, it isn't. But it may very well be desirable for all concerned, up to a point.
There are two extreme possibilities in resolving the Greek debt crisis:
There are two extreme possibilities in resolving the Greek debt crisis:
- Plan A: Massive default with near zero recovery for creditors and exit from the eurozone.
- Plan C: Massive Greek fiscal adjustment with murderous wage, pension...
The Lineup
I don't know why, but the following picture from Reuters strikes me as hilarious. It must be the fact that these guys are all being sworn to tell the truth. Uh-huh..
As preamble, let me take you back 12-13...
From The Goldman Sachs Congressional Testimony
Oh, and notice the IDENTICAL 6-inch thick binders in...
The End Of Debtopia
April 26, Monday morning update: Greek 5-year CDS reaches 700 pts. (see chart below). Assuming a 67% recovery, this works out to a cumulative probability of default (CPD) of 67%. At 80% recovery, CPD rises to 82%. These are daunting odds, indeed, and mean that Greece will not likely avoid some sort of "credit event".
Most Likely Scenario For Greek Debt Crisis
I will hazard a prediction: The most likely resolution of the Greek debt crisis is a combination of debt restructuring (haircut plus maturity extensions) and IMF/EU funding for the next 2-3 years.Before I get accused of becoming a prophet in my o...
Oldie But Goldie
Well, well... Turns out that Goldie wasn't "doing God's work" after all. The SEC has just charged the world's biggest investment bank with defrauding investors in a sub-prime mortgage synthetic CDO (i.e. a virtual bond made up of credit default swaps).
I will spare you repetition of details - readers of this blog ...
Suspension Of Debtbelief
I have been a close observer of the Greek Debt Crisis for quite some time now. What strikes me most is the absurdity of calling for additional debt as a solution. It's not enough that Greece already has a government debt rapidly approaching 120% of GDP and cannot realistically fund itself through the markets, its...
Crossroad Signs
We are, as usual, at a financial crossroads and the signs to guide us to the proper route are, also as usual, smeared with graffiti and conflicting directions. But in this instance the crossroads are significantly more important than at other times; it's a bit like equality amongst Orwellian animals. Decisions made in times of...
The Great Debt Bailout
This blog was created in late 2006 in order to "vent" my frustration over the huge debt bubble and what I perceived to be the risks it posed to the global economy. In summary, I claimed that the economy had become hooked on debt to create additional GDP growth - or "growth" in quotation marks...
Do Easter Bunnies Lay Eggs?
Commenting on a previous post Debra, a devoted (smile) reader, had this to say:
It would seem that man is a gambling animal that JUST HAS TO HAVE HIS DOSE (fix ?) OF RISK, (like he has to have his dose of arguing about the number of angels on the head of...
Say Hello To Theo Bawki
Theo Bawki is not a friend from South Africa. Rather, it's Sudden Debt shorthand for The End Of Banking As We Know It. And if the Volcker Rule passes Congress without a bunch of customized loopholes and exceptions, that's exactly what is going to happen. Thankfully.
As preamble, let me take you back 12-13...
Perception Creates Reality
A reader commenting on the previous post on CDS asked: "... if two people have a bet on a football match, does that affect the result?"
This is a seemingly innocent and deceptively easy question; but, in fact, it is very difficult. To answer it we must touch upon the very core of our...
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