
Dandelion Salad
By Mike Whitney
December 09, 2009 “Information Clearing House”
Greek Finance Minister George Papaconstantinou has the European Commission over a barrel and doesn’t even know it. Instead of dragging the EC over the coals–like he should –he’s carrying on like a blubbering crybaby. “Steady on there, Georgie”. Treasury Secretary Hank Paulson didn’t go wobbly when he stormed up Capital Hill and demanded a $700 billion TARP bailout, did he? Well, then, at least learn from history. The EC is not going to let Greece default and trigger another Lehman Brothers-type meltdown. That won’t happen. If G-Sax and JPM are Too Big To Fail (TBTF), then surely Greece is too. That means the Greek Finance Minister needs to summon his courage and hammer out the best deal possible for his country. Wishy-washy will get you nowhere.
Markets started tumbling this week on news that Fitch Ratings cut Greece’s debt rating from A- to to BBB+ which means it will cost the government more to roll over its debt in the future. It also means that the ECB may not accept Greek government bonds as collateral when they return to the pre-crisis rules in 2011. The ratings flap has reawakened Dubai fears and the possibility of a sovereign default within the EU.
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