A Greece spokesperson is saying the following after the call with Merkel and Sarkozy, *GREEK BUDGET DECISIONS WILL SHIELD ECONOMY, STATEMENT SAYS, *GREEK BUDGET DECISIONS IN RECENT DAYS WILL HELP MEET TARGETS, *GREECE DETERMINED TO CARRY OUT ALL ACTS TO MEET BUDGET PLANS. GREECE TO MEET 2012 FISCAL TARGETS, PRIMARY SURPLUS WITH NEW MEASURES. Bottom line, Greece is likely going to get its next 8b euro tranche in 2 weeks but apparently Merkel, Sarkozy and Papandreou still don’t like paying attention to the bond market where the 1 yr yield in Greece is yielding 141.8%, the 2 yr is yielding 74.5% and the 10 yr is yielding 25.7%. This says of course that the only lifeline the Greek government has is thru the generosity of its neighbors as they have almost zero chance of paying back in full all that is owed. I mentioned Merkel being in fantasyland yesterday and delusion is the word today that comes to mind after seeing these Greek headlines. One would think at this point that Greece would want a more pronounced debt restructuring in order to slash their debt instead of playing this game of pretend because they’re afraid to hurt the feelings of bondholders.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “Fantasyland yesterday, delusion today”

  1. The problem here is the consequence of a greek default.
    The right thing for Greece would be a default, but the implications, everyone and I do to, believe are massive.

    Incredible… no way out.

  2. Gaucho says:

    There’s always a way out. Trust me, I’m argentinean.

  3. kenny powers says:

    Re: Gaucho

    Damn right. Here’s what I think the Greek strategy is:

    The greek governement is positioning for an inevitable default. They know very well that they have to. But the more they have consolidated their economy before they do, the better off they will be when they do default, as it will be easier to access capital markets at this point. People seem to view the Greeks as pussywhipped by Ms Merkel. I disagree. I think they are playing their hand as well as they can.