The Die Is Cast

Well, according to the solons of the EU, everything is fixed. Joke. Nothing is fixed. All that has happened is that private banks owning of Greek bonds have agreed to take a 50% haircut, that is forgive half the principal balance. In the hands of public banks, specifically the ECB, those same bonds are to be paid in full. Right. That might have something to do with the fact that the ECB would be bankrupted by that 50% haircut. This means that Greece gets a reduction of something less than 30% in its outstanding balances. There is no hope that Greece will be able to pay that either, as it continues to run huge deficits, exacerbated by strikes and other actions by the “entitled.” And now the other PIIGS will be lining up for similar benefits. Doesn’t matter to Mr Market, it is all sunshine. We’ll see about that.

Third quarter GDP came in positive this morning. Personal consumption was strong, something of a mystery as there are huge divergences between reported consumption and historically highly correlated data series, such as consumer confidence, here and here, and inventory-to-shipments.

As Felix Zulauf sums up, it is too late. The die is cast.

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: