My fellow Slope-a-Dopes, after my last two epic failures, I have formally requested that Tim Knight strip me of at least two of my highly valued, well earned stars. I am certain several of you would like me to be demoted further to a corporal, or perhaps an even lower rank. However, as long as I am not thrown out of the military all together, my dear brothers in arms, I will continue to do what it is I do. As an Idiot Savant, what that is, I am not exactly sure…..let's get to it:
Greece is back front and center this weekend, clearly we are getting closer to the long awaited moment of truth. What that is, is not exactly clear, to fittingly quote CSNY, a famous social protest band of the late 1960s. Their "Four Way Street" album also seems appropriate here, since as of this morning, all the important international newspapers covering the story, still have no clue as to where this is all going, nor where it will end up.
One thing is certain, the German public has no appetite to bail out the Greeks again. Over 80% are not impressed with the reform efforts implemented thus far, and want no part of the further largess, unless they immediately see real solid tangible reforms on the ground, monitored by an independent, German led uber Troika. On the other side of the coin, the hapless Greek people, having already swallowed their first spoonful of the acrid austerity serum, which apparently has not taken effect, and regrettably, actually seems to have increased their unbreakable fever, are about ready to clamp their teeth down hard, refusing to take another forced fed spoonful of the deadly medicine.
To add to the Hellenic drama, last night a gang of hard core youth protesters launched Molotov cocktails at the Greek Presidential Palace. I actually took pictures of this magnificent mansion, while in Athens last summer. For those not obsessed with Greek political minutia, the President of Greece, unlike the Prime Minister, is revered as his position is mostly a ceremonial post. The President is the nominal Commander in chief of the Armed Forces and occupies the first place in the Greek order of precedence. His standing however is largely ceremonial, as the President's powers were limited under the current Greek Constitution of 1974. Thus he is seen more as a figure head which represents the sovereign dignity of Greece. Traditionally he is above politics, it is the prime Minister that runs the daily show. The fact that his house was attacked last night, is yet another indication of how volatile the Greek situation has become. Adding to this air of pending upheaval, the twittersphere is a buzz with word of a new mass protests gathering being organized once again in Syntagma square.
After reviewing all of the various, "in the know" publications this morning, the entire impasse basically boils down to this: The Euro zone finance ministers have told Greece it could not go ahead with an agreed deal to restructure privately held debt until it guaranteed to implement reforms to secure a second financing package from the euro zone and the IMF. This is no small bridge to cross, as the Greek unions, and employer associations are a powerful obstacle more than prepared to reject the private-sector pay cuts demanded by the Troika, which the international lenders see as a linchpin to any rescue package. Without it, Greece will be unable to repay a €14.5bn (£12.1bn) loan due on March 20.
So what's the big deal? Who cares about Greece, after all it's just a small greasy pimple on the European Union's back side, right. Well, here is the rub, the international private creditors / vulture hedge funds are now sitting on the fence here, salivating. If they cut a private deal with the Greeks, and Greece is not funded by the ECB, ESFS, & IMF, then they will not be paid even 20 cents on the Dollar for their EURO Bond holdings, they will get zilch, nada, zero, as Greece will effectively be bankrupt. Thus, the prospects of forcing a real disorderly default gets more tempting for them by the hour, as it would force the international banking cartel & Its stooge the ISDA (The International Swaps and Derivatives Association) to accept the situation for what it really IS, which is an actual sovereign default event. And, we all know what that means, the CDSs trigger…..and the contagion explosion begins in ernest.
BDI SOH's Idiot Savant