“Mish”: What cannot be paid back, won’t.


From Mike “Mish” Shedlock’s Global Economic Analysis blog – ECB Stuck in Sovereign Debt Garbage, Seeks German Help to Unload It; Anger in Greece, Ireland; Germany Sets High Price for Bailout Changes:

Anger in Greece, Ireland

I keep waiting for Ireland to tell the EU and ECB where to go. With anger rising in Irish citizens, hopefully we will see some action. The Telegraph reports EU paralysis drives fresh bond rout…

What cannot be paid back won’t.

Thus, regardless of what Trichet, the ECB, or EU may want, Greece, Ireland, and Portugal are likely to default. The sooner that happens the better off Europe will be.

Thus, the one thing that makes the most sense is to restructure the debt and make senior bondholders pay the price. Unfortunately that is the one thing the ECB is foolishly attempting to prevent.

The ECB compounded its problems by unwisely purchasing sovereign debt hoping to stabilize yields. As a direct result it is stuck in PIIGS debt with yields exploding out of sight. This is the price of Hubris but don’t expect central bankers to learn a damn thing from it.

Advertisements
This entry was posted in Bankers' Bailout, Debt Default/Restructuring, ECB/IMF, EU, ireland, Solutions and tagged , . Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s