Default now or default later?

At long last the ISDA has agreed that Greece in in default, and that default constitutes a "credit event". Bloomberg reports Greece Deal Triggers $3B in Default Swaps. Greece’s use of collective action clauses forcing investors to take losses under the nation’s debt restructuring will trigger payouts on $3 billion of default insurance, the International Swaps & Derivatives Association said.

The Greek support package has not yet failed. But you can hardly call it a success. Investors have little more confidence in Greek debt than they had last week. And - it seems - little confidence in the eurozone either. The euro today sank to a one year low, and markets shuddered across Europe. Why? Apparently, even bond market vigilantes think you can ask a government to do too much.

It is one thing for creditors to interfere in a recipient’s policies. It is another to tell them to suspend elections, writes Wolfgang Münchau

It is one thing for creditors to interfere in a recipient’s policies. It is another to tell them to suspend elections, writes Wolfgang Münchau

Things have no gone full circle. Wolfgang Münchau, a staunch euro supporter now realizes the political hopelessness of it all. In an article in Der Spiegel, Münchau shows he is ready to throw in the towel. Via Mish-modified Google Translation ...

The stubbornness of economic writers, nannycrats, and eurocrats is nothing short of amazing. No matter how many times Merkel rejects eurobonds and other transfer mechanisms, the vast preponderance of economic writers, nannycrats, and eurocrats keep proposing the same futile actions, over and over, and over again. For example, Financial Times columnist Wolfgang Münchau writes How to build a fiscal union to save the eurozone.

By CFA Institute: By Ed Bace