Tag: debt crisis

  It’s taken a very long time, but the easily predictable implosion to Europe’s sovereign debt crisis is finally approaching.

  The same day that thousands of protestors against austerity measures returned to the streets in Athens, the Greek bailout talks also collapsed.

 “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.”

 Europe’s financial leaders want Greece to cut its budget further in order to make up for the gap that has been caused by the deepening recession. Of course the cuts are making the fiscal gap worse by slowing the economy further.

  Meanwhile, yields on 1-year Greek bonds have hit 70%, a level so far above affordable that a Greek default is already priced into.

  One thing we can all agree upon is that the debt-ceiling stand-off in Washington is a totally manufactured “crisis”. It is a financial crisis of choice. If I was a little more cynical and Machiavellian, I would think they were trying to distract us away from a real financial crisis.

 In fact, there is a real financial crisis happening in Europe. Until a week ago it was all over the front pages – Greece’s default.

 Perhaps you heard something about a bailout of Greece. That news came out right about the time that Greece dropped from the headlines.

 Problem solved, right?

Wrong.

  The bailout plan almost immediately ran into problems.

For starters, the rating agencies downgraded Greek debt to default levels BECAUSE of the bail-out plan.

 Rating agency Moody’s has downgraded Greece’s credit rating from Caa1 to Ca after the deal brokered July 21 by European leaders that included voluntary losses taken by creditors…

  One thing we can all agree upon is that the debt-ceiling stand-off in Washington is a totally manufactured “crisis”. It is a financial crisis of choice. If I was a little more cynical and Machiavellian, I would think they were trying to distract us away from a real financial crisis.

 In fact, there is a real financial crisis happening in Europe. Until a week ago it was all over the front pages – Greece’s default.

 Perhaps you heard something about a bailout of Greece. That news came out right about the time that Greece dropped from the headlines.

 Problem solved, right?

Wrong.

  One thing we can all agree upon is that the debt-ceiling stand-off in Washington is a totally manufactured “crisis”. It is a financial crisis of choice. If I was a little more cynical and Machiavellian, I would think they were trying to distract us away from a real financial crisis.

 In fact, there is a real financial crisis happening in Europe. Until a week ago it was all over the front pages – Greece’s default.

 Perhaps you heard something about a bailout of Greece. That news came out right about the time that Greece dropped from the headlines.

 Problem solved, right?

Wrong.