Beware of Greeks Bearing Budgets

Another week, another solution to the Greek drama. The IMF is coming in, which should be a blow to the esteem of any self-respecting European, defaulting would have been the nobler path. With the announcement of at least $40 billion in new debt, European markets are all strongly up. It would seem at some point the correlation between the creation of debt and the rise in asset prices might become apparent to all. As Soros' former partner Jim Rogers said seven or eight months ago of the Fed's pumping, "The Dow 15, 16 thousand, why not?" Why not indeed.

The best is the Greek budget numbers show they should be running one of the big global banks:

Thursday's selloff began in part after the EU statistical authority, Eurostat, said Greece's 2009 budget deficit was €32.3 billion, or 13.6% of its gross domestic product. Greece had estimated the deficit at 12.7%. But in its semiannual report on EU debt and deficit, Eurostat noted that it still didn't have confidence in the new figure, which it said could actually be above 14%.

A year ago, Greece said its deficit for 2009 would come in at 3.7% of GDP. But the unveiling of a raft of accounting errors and misrepresentations pushed it up to 12.5% in October 2009. Greece, which has a years-long history of post facto changes to its debt and deficit numbers, later adjusted the figure to 12.7%. As recently as two weeks ago, officials denied reports that the figure could surpass 13%.

Well, stay tuned, the Greek economy continues to slow, we'll see what happens next week, speaking of which, it looks like we'll get financial "reform" next week. The Reps have changed their tune and are now making support noises. Some say the Reps are concerned about being on the wrong side of public opinion, but it's much more likely the banks are content with the Senate and House bills, and giving the nod. One should be most concerned about what's happening in DC when it's bipartisan.