God asked Adam, “What’s wrong?” Adam replied, “I’m lonely.” So God said: “Adam, I will make you a partner. She will wash and cook and clean for you, she will listen to what you have to say and never interrupt you. She won’t nag you about your actions and she will even bear your children. She will stay loyal to you and never be influenced by other men.” So Adam asked, “Well, what’s his gonna cost me?”
“An arm and a leg,” said God. Then Adam asked, “Well what can I get for a rib?” And the rest is history. It is always the history that matters; if you pay attention.
It has been almost three years since I said that Greece would go bankrupt. I first made that pronouncement on January 13, 2010 and advised exiting the credit. The yield on the Greek ten year was 4.38%. Lots of water underneath the bridge since then. Greece has made a second run at it, Portugal plunged into the rapids, Ireland grabbed its banks and headed over the falls and now Greece is about to take a third try at obliteration. I have stated and long held the view that Greece would keep on with it until the very last Euro that could be soaked from Europe was handed out and then the game would stop. The idiocy of those on the Continent hiding behind a united Eurozone that was locked and everlasting and inscribed in the Last Rite books in Heaven has played out far longer than common sense would dictate but it is politics here and fanciful dreams and the normal judgment utilized for bankruptcies has been cast aside again and again as the debts grew and as the uncounted liabilities became real liabilities and as the word “contingent” became meaningless while the nations of Europe turned a blind eye and ignored it all the best they could.
“Facts do not cease to exist because they are ignored.”
Given the length of time that has passed the markets are mostly immune now, deadened by some kind of economic Novocain where there is little feeling left and where the ECB’s “Save the World” rhetoric overshadows all issues and problems and so the prevailing attitude is “Yes, there is Greece; but it doesn’t matter.” I am afraid that this will not be the case in the coming weeks and that Greece will matter once again as the severity of the situation rises anew and like the Gorgon and their quite ugly heads will be revealed once again. You may recall the tale of the three sisters where Stheno and Euryale were immortal but their sister Medusa was not and she was slain by the mythical demigod Perseus. I fear that the immortals are about to be slain next and it could come in a number of ways.
“One of the advantages of being disorganized is that one is always having surprising discoveries.”
-Winnie the Pooh
The IMF has suggested that Europe take the pain and Europe is refusing and so the IMF may decide not to fund and leave the nations on the Continent to their own designs. Any extensions in terms will require another $40 billion give or take and some countries might actually refuse to participate as a matter of national politics. Greece, itself, may not be able to take the pressure of the austerity measures demanded as the coalition government topples and during the call for new elections defaults and throws the financial system of the world into havoc. It will be systemic, have no fear, if Greece defaults, it will not be an isolated incident because the size of their total debt now exceeds $1.5 trillion which is the number you get if you count what should be counted and not some far lesser number provided by the EU when they pick and choose what they count and with great care and with obvious deficiency.
“If the person you are talking to doesn’t appear to be listening; be patient. It may simply be that he has a small piece of fluff in his ear.”
-A.A. Milne, the author of Mr. Pooh & friends
If there are ten tanks lined up against you on the battlefield and you radio back to headquarters that the enemy only has six tanks that is your decision but then don’t be surprised when the other four tanks start firing shells into your position. “Watch out for all of the tanks shells,” would be my warning!