Good post & I think you’re spot on. One thing that this does make me wonder is if this may be the first step in setting up a private placement market for wayward sovereign debt. Kind of like a shelter for disavowed pets – just not as cute and definitely doesn’t tug at your heart. But in order to set it up, they’d need to backstop and lend them money now – at discounted rates of course.
I don’t know about you, but I think the EU leadership as well as leaders of many of the European countries are really playing with fire. If this goes wrong (and I think the probability of it going wrong is significant), the *concept* of credit may cease to exist as nobody will believe in credit worthiness. And nobody will be there to backstop them.
Cash & carry could be the name of the game…