Greece On, Greece Off, Greece On, Greece Off

It seems markets around the world are still quite focused on Greece to see what will happen. The same thing happened last year, they were bailed out and the can was kicked. Here we are again and Greece is, if anything, worse off than it was a year ago. So they may get another bail out for a while to ward off the evil spirits, but only to temporarily delay the pain. We will get there (i.e. haircuts or perhaps Greece leaving the EU so it can devalue its own currency), the math makes any other alternative virtually impossible to conceive, but the EU is putting its head in the proverbial sand and hoping that day never comes.

I could link articles but they are everywhere these days on Greece's problems and how it is just the first domino in the PIIGS game. Curiously, what I am not seeing in the press is the well recognized problem in Greece that a significant number of citizens there that make big dollars are not paying the taxes they owe. One might think that cracking down on tax cheats when cheating is rampant might help a tad in their fiscal issues. And for you idiots in Greece not paying your taxes, you will soon pay the price for it. Seriously, the goverment cannot survive for free and the poor being the only ones paying what is due will not make ends meet. I take solace that the tax cheats in Greece may end up paying the price in time, and I think they will. Perhaps better now to save the country and themselves from something worse they should start paying up and consider paying off some back taxes. Just a suggestion.

Greeece's debt will undoubtedly get funded for now and push the press coverage on its problems off until the fall, when once again the markets will focus on the default risks. And by then many others in the chain will have their credit downgraded and the problems simply keep getting worse. Personally I am simply tired of this axe hanging over the world economy. It has been there well over a year and is not going away. It is like unemployment and housing issues in the U.S.

QE2 is coming to a close and we are really not much better off than when it started. This summer looks likely a replay of last summer with the economy cooling, unemployment continuing, markets struggling, housing still in the dumper and Bernanke and Obama trying to explain why their moves to date have not worked as planned. When the PIIGS finally go under, things will get worse - for a while - but letting them hang on with no real hope is simply agonizing for everyone.

So if anyone living in the PIIGS is listening, let me ask one quesiton: do you think the first country to default or the last will do the best? If you have a doubt, ask Iceland.

Disclosures: None