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Italian default scenarios « naked capitalism
Cross-posted from Credit Writedowns The most important debate of our lifetimes is now ongoing. For many, the answer will be existential. First, the question: Should the ECB “write the check’ for the euro area national governments? In thinking about the answer to this all-important question, I prefer to shift the focus by changing the verb “should” to “will”.
The European Union is hoping that aid to Greece and Ireland combined with closer economic policy coordination will be enough to put an end to the euro crisis. But that's not likely, warns US economist Barry Eichengreen. First and foremost, he says in an interview with SPIEGEL, Europe needs to help out its ailing banks. SPIEGEL: Professor Eichengreen, you have spent many years studying whether the European common currency union could collapse. Your conclusion: It would be technically possible for a member state to leave the euro zone, but that politically it is about as likely as a meteorite hitting the Eurotower in Frankfurt.
Interview With US Economist Eichengreen: 'Europe's Banks Are in Far Greater Danger Than People Realize' - SPIEGEL ONLINE - News - International
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USA: Consumer spending eases Private consumption growth eased in March, although personal income and savings rate rose. It might still remain resilient in 2012. Financial markets:Handelsblatt Reports Second Greek Bailout Package To Be Delayed | zero hedge
It seems that Europe once again shot its last bullet a few days too early (to use a more polite phrasing than the alternative) with the announcement from last week that the Greek bailout was a done deal. As we speculated, various complications will soon emerge for anyone who cares to read the fine print in the bond indentures which preclude the imposition of Collective Action Clauses, thereby making an enforcement of a "voluntary" maturity extension problematic if anything. Below we present an article that appeared in Handelsblatt in the last hour, which indicates that opposition to the rescue has emerged not only from Slovakia, but from the UK as well. The English is about as garbled as possible thanks to Google translate, but oddly enough far more understandable than the periodic soundbites of outright lies from the pathological troica of Rehn-Junker-Trichet.
Exit from comment view mode. Click to hide this space Comments View/Create comment on this paragraph NEW YORK – The countries known collectively as the PIIGS – Portugal, Ireland, Italy, Greece, and Spain – are burdened with increasingly unsustainable levels of public and private debt.
A Loan and a Prayer by Nouriel Roubini and Stephen Mihm - Project Syndicate
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