Greek PM orders a report on implications of a default...A Little Late

Just last week I said that Greece is close to becoming the first i\developed nation in 65 years to default and said in all seriousness, I doubt they have begun any planning for such an event.

I don't know why the EU is always so far behind the ball in every aspect? When I was managing our family cafe and the season was getting rough as Florida and especially Boca Raton are exceptionally seasonal (Feast and Famine), I always had a plan of what our inventory was worth at current market value, where I could sell it quickly if need be, what the tax implications would be for the owners, etc. I wasn't planning to fail, but simply making sure I knew where we stood if things got out of control quickly.

So when I said last week I doubt the Euro-zone had done the math of what a disorganized default would look like, imagine my surprise finding out that Greece itself hasn't done the math yet and just ordered it today as per Bloomberg!

Merkel's reaction?

According to the NASDAQ newswire,

We Refuse To Acknowledge Greek Bankruptcy

So is this some late game Hail Mary stunt Papademos is putting on to get the Troika to bend? Who knows, but judging by the past EU summits, it wouldn't surprise me if they really had not done the math yet.

Speaking of which,

Wall Street has said that Greece is a "Blind spot" and that the risks from Greece are not fully priced in.

Of course their not, no one has the imagination to understand the jolt that would travel through the global economy, how a Greek default would effect German exports or Chinese exports and how a slow down in either country would effect the IMF or other EU credit ratings, what the implications of a change in credit ratings would bring, I could go on forever, there's just not enough imagination to crunch the number and clearly understand the risks.

Look at Lehman! Within days of the crisis really taking off and with the Treasury Secretary focused on the financial system, he didn't even know that GE was on the verge of losing all access to capital and they make lightbulbs! I'm being a little dramatic, but they didn't understand how Lehman alone would freeze up all liquidity and effect industries that seemed far removed from the crisis. They were playing catchup at every step. In fact Paulson didn't even know that AIG was about to fail until one of the investment banks he was having a meeting with told him, I believe it was Jamie Dimon. AIG insures 1 of every 4 planes in the sky and a whole lot more, yet the Secretary of the Treasury had no idea.

Nuff said for now...