Posted on 01/30/2012 6:17:39 AM PST by blam
CHART: You're Going To Need Big Haircuts To Make PIIGS Debt Sustainable
January 30, 2012
Global Macro Monitor
Interesting calculations posted by Spiegel from the Kiel Institute on the sovereign haircuts which would make the debt of the listed countries sustainable. We would love to see the calculations for the U.S., U.K., and Japan.
(Excerpt) Read more at businessinsider.com ...
Not with scissors, with a razor. There won’t be any hair left.
GimmegimmegimmegimmegimmeOpa!Opa!Opa!we’llmakethemalllooklikeTellySavalasOpa!Opa!Opa!Gimmegimmegimmegimmegimme
The European economy is a train headed straight into the side of a mountain. The only question is “when” will it hit. The problem is way too big for any solution that won’t involve so much pain that it will lead to a hot WWIII.
And the US is in a similar situation. And some suggest China is too.
....the reason being is that when an official default of a government is recognized, the vessels known as "credit default swaps"(insurance against defaults) are triggered..
..and NOBODY knows what will happen then...there will be so much confusion and chaos..the whole mess could finally collapse once and for all..
..which would be kind of bad for some of the bankers and politicians who started this whole mess in the first place. They could be forced to sell their G5 and "downsize" into an old junky Citation....maybe even have to give up one of their villas somewhere...or worse, get hung off the local bridge at high noon.
The World Socialist Website, despite it's name, usually has some good articles (sprinkled with swipes at Capitalism) on the mess in Europe. Here's one European Central Bank averted global financial freefall
From the article, per your comment: While US banks and finance houses are not overly exposed to European debt directly, they would be badly affected by a default. This is because the credit default swaps (CDS) taken out by lenders as insurance would be activated and firms such as Goldman Sachs, heavily involved in CDS operations, would take a major hit. Washington’s US interest, therefore, lies in keeping the system going with ever greater amounts of bailout money.
...that would be us..."We the People of the US"...AGAIN.....for at least the 3rd time in a hundred years.
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