Furthermore, even accounting for accounting slippages, the Greek budget deficit for 2009-2010 is likely to be lower, possibly much lower, than those in the UK and US, according to Organisation for Economic Co-operation and Development projections. Nor is Greek public debt unusual, by current standards. It is about half that of Japan and lower than Italy's. So why Greece and why now? Here is my conspiracy theory....The first step in my theory is the non-controversial conclusion that the only reason why the Greek government might default is market pressure....Here comes the second step of my conspiracy theory. Rumour has it that some large German and French banks have a significant exposure to Greek debt. Rumour also has it that the same banks have yet to recognise much of their losses on US subprime mortgages. Now things start hanging together. France and Germany can allow Greece to default, but not some big, systemically important European banks....
Rumour has it that some large German and French banks have a significant exposure to Greek debt. Rumour also has it that the same banks have yet to recognise much of their losses on US subprime mortgages. Now things start hanging together. France and Germany can allow Greece to default, but not some big, systemically important European banks....
On another note: as you may know, I've said for a while now that the Greece issue would be used by Berlin and Brussels to bring down the Euro, in order to make European products more affordable globally. The US dollar has simply dived too deep. For all I know, Merkel, Sarkozy and Trichet may be actively feeding international media horror stories about Greece and Portugal. But that doesn't mean they'll let them fall.
http://theautomaticearth.blogspot.com/ Hey, Grandma Moses started late!
If [the European counterparts to Henry Paulson and Tim Geithner with respect to U.S. banks] bail Greece out, one day they will have to be grilled too, and they will have no good answer.
Too bad that "some banks are too big to fail" line only works once. The march of civilizations is a series of defenses that man has put up against the dread of pure existence.
