After bailing out American homeowners and the banks themselves in 2008-2009 with vast quantities of cheap money, fuelling moral hazard, governments and financial markets have suddenly discovered a new commitment to fiscal rectitude — mostly someone else’s rectitude.
Reuters--Greece Should Default and Reschedule
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Well, well, well here is a comment from that article that makes me think of your favorites at Goldman:
ReplyDelete"Greece is not bankrupt and need not default. It faces a liquidity crisis, in part because of a speculative attack on its economy that has driven up its borrowing costs to crippling levels. With support from the EU, those borrowing costs can be contained and Greece’s obligations can be met. Denying Greece that support and forcing her to default would have huge adverse impacts, way beyond Greece alone. It would reward the short-sellers now targeting Greece –and the Euro- and encourage them to attack other eurozone countries suffering disproportionately under the current economic downturn. That is also a moral hazard we do not want to foster."
Plus, I wouldn't necessarily trust what anyone who used to work at Sempra has to say....