Euro-zone countries have secretly started preparations of an extension of maturities on Greek debt paper and setting up an independent organ to sell off Greek state assets.Apparently the EUnion financial wizards have added a new word to the lexicon of the EUnion Lie: re-profiling. According to the FD 're-profiling' is a process of voluntary extension of bond maturities, involving commercial investors, without it triggering a 'credit event'. In a credit event commercial debt holders would liquidate their credit default swaps on Greek debt en masse, leading to another shock to the market.
This is reported by sources in Brussels. The plans, aimed to help Athens meet its financial obligations, are extremely sensitive. The European Central Bank (ECB) resists restructuring of Greek debt. Such would mean investors give up part of their claims. The ECB fears such measure may precipitate a new crisis in the European financial sector.
According to sources officials of the euro-zone countries have already begun the technical preparations for a light for of restructuring: A 're-profiling' of debt, meaning a short extension of maturity on bonds.
It may look like this is a safe way of lightening the load for Greece. But it doesn't change much about that benighted country's insolvency. And one wonders what the reaction of the market is going to be. Especially in light of Moody's giving off the same warning Fitch made last Friday.
What is most striking in this episode, probably because it has become so dreadfully familiar: It is all done, yet again, in secret, in back-chambers, where democratic control and accountability are not a factor. Over on ZH we have Paul Craig Roberts, the co-founder of Reaganomics, lamenting this state of affairs. He argues that in fact there is probably more democracy in China then there is in the West.
The west prides itself that it is the standard for the world, that it is a democracy. But nowhere do you see democratic outcomes: not in Greece, not in Ireland, not in the UK, not here, the outcomes are always to punish the innocent and reward the guilty. And that's what the Greeks are in the streets, protesting. We see this all over the west. There is no democracy, there are oligarchies, some of these smaller European countries are not even run by their own governments, they are run by Wall Street... There is probably more democracy in China than there is in the west. Revolution is the only answer... We are confronted with a curious situation. Throughout the west we think we have democracy, we hold ourselves up high, we demonize China, we talk about the mafia state of Russia, we talk about the Arabs and so on, but where is the democracy here?Revolution is the only answer, he says. Just sit back and mull it over for a little...