Greece: if austerity doesn't work... Try more austerity! | 287 comments (287 topical, editorial, 0 hidden)

Try more austerity! (4.00 / 3)

Oddly, I read last week that Enda Kenny was prescribing that smaller or secondary Irish banks holding the nation's bonds be dealt haircuts. So, here we have governments allowing defaults on entities that presumably have very low exposure to credit default contracts. This literally means that a credit default contract in effect operates as a form of blackmail or racketeering over economies. It's like the mob--you don't want to pay us? See what happens! But if you're small time player, you will be bumped.

Better yet, the big fish will swallow the small banks when the haircut is issued to the guppies.

by Upstate NY on Mon Jun 13th, 2011 at 01:30:34 PM EST
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Re: Try more austerity! (none / 1)

Only the biggest investment banks issue CDS. Widows and orphans buy bonds. Do the math.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 02:31:22 PM EST
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Re: Try more austerity! (none / 1)

Oddly, I read last week that Enda Kenny was prescribing that smaller or secondary Irish banks holding the nation's bonds be dealt haircuts.

Are we talking about specific banks or about subordinated debt holders regardless of who they are?

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Mon Jun 13th, 2011 at 04:27:30 PM EST
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Re: Try more austerity! (none / 1)

Banks. He specifically mentioned banks.

by Upstate NY on Mon Jun 13th, 2011 at 11:00:00 PM EST
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