Europeans paralysed but rest of world largely unaffected by Greece; Japan up, China down; US Fed on track; benchmark yields fall; NZ$1 = 68.7 US¢, TWI-5 = 72.3

I would think the Greek Crisis is very much on the minds of US powerbrokers, just as it was when the broader Eurocrisis first came to light.

UCD economics professor, Morgan Kelly’s article in the Irish Times last month appeared to reveal for the first time that a hitherto unknown player in Irish economic affairs, US Treasury Secretary Timothy Geithner had played a pivotal role in the IMF/EU bailout negotiations last November 2010. "According to Morgan Kelly “The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US treasury secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are”...But what “matter”? I suppose we want to know why someone from the US would interfere in a bailout for Ireland. If that is what we want to know then Wikileaks has already provided the answer apparently. In their release of US State Department cables, there is one which reportedly seems to explain exactly why the US had a keen interest in bondholders in Irish banks being repaid : Secretary Geithner was concerned that if Ireland refused to repay bank bondholders then, in the words of Britain’s Telegraph “that could have spread contagion to the entire European system, to which American-backed “credit default swaps” were exposed to the tune of €120bn” (Wikileaks appears not to have published any cables beyond February 2010 on its website, and presumably this cable from Secretary Geithner is dated towards the end of the 2010, so an attempt will be made with the Telegraph to get the source cable and this post will be updated with any response).

–There’s no mystery to US Treasury Secretary, Timothy Geithner’s intervention in the Irish bailout. Wikileaks has already revealed the reason."
https://www.creditwritedowns.com/2011/06/greece-as-europes-lehman.html

"The ISDA ruling favors the big banks that sold the CDS because those banks sit on the ISDA board,” said Tavakoli, a former head of mortgage-backed-securities marketing at Merrill Lynch & Co. “Smaller banks or other institutions that might have bought the swaps to protect against a default like this don’t have as much influence.”

Some bondholders might challenge the ruling in court, Tavakoli said. Lauren Dobbs, an ISDA spokeswoman, declined to comment.

U.S. Treasury Secretary Timothy F. Geithner urged European leaders and finance ministers to increase the firepower of their 440 billion-euro rescue fund. The Obama administration’s stance might have been prompted by worries that defaults in the euro zone would hurt U.S. banks through their CDS exposure, according to Christopher Whalen, managing director of Institutional Risk Analytics, a Torrance, California-based bank-rating firm. "
http://www.bloomberg.com/news/articles/2011-11-01/selling-more-insuranc…

"At least with MMP we do have a limit to the absolute power to some degree." Some insignificant degree, I'd say. NZ is a serial dictatorship, witness the TPPA debacle.

Don't be fooled Dazz it is not democracy vs communism!!

Democracy also requires that individual constitutional rights are known and understood by all. No political party should ever offer carrots to the voters if everyone knew and respected the individuals rights then carrots wouldn't work.

True democracy is not about 1 person 1 vote with the highest number of voters winning....we are all losers if we think that is democracy in action......bribery and corruption are offences for a reason!!

Until all media take a hard line approach against political bribes and corruption then we are all losers.....Individual and constitutional rights are how every policy and offering should be measured!!

I don't know about communism but a benevolent dictatorship as in Singapore might be the go. With a 3 year cycle here no one has the power to make any significant changes before they need to start smiling for the cameras again.

Who is our Lee Kwan Yew?
A better question might be who will be our first Chinese born PM?

Not at all. Just pointing out the limited position most Central Banks are in, ours being pretty good by comparison.

Default is a risk that lenders take, being a responsible lender reduces the risk, lending to the buyers of your goods without looking at the consequences is irresponsible lending and increases the risk of default.
Lenders have to take some responsibility, and this manifests itself as a write off for a bad investment.
No one like to lose money, but it comes with the territory when you lend.

They are better off being like Britain, inside the EU but not using the Euro.
The EU benefits the well run countries like Germany by keeping the Euro lower than a Germany alone Euro would be. I guess the plan was that all countries would average out after a while but Greece obviously has been unable to raise its bar.

yes the whole story has not been told how private debt was moved to the government, when greece tried to back out of arms buying from france and germany they were not allowed.
it has landed on the people who had no idea what was happening, could the same thing happen here HMMM food for thought with this governement

It was never about paying money back, or reforming Greece in order to make its economy a more competitive or it's government more efficient. It's all been little more than petty, schoolboy recriminations over the Greek elites lying to the European Union about the actual state of the government books, as these illustrative revelations from transcripts of Timothy Geithner's memoirs make plain.

"I said at that dinner, that meeting, you know, because the Europeans came into that meeting basically saying: “We’re going to teach the Greeks a lesson. They are really terrible. They lied to us. They suck and they were profligate and took advantage of the whole basic thing and we’re going to crush them,” was their basic attitude, all of them….

But the main thing is I remember saying to these guys: “You can put your foot on the neck of those guys if that’s what you want to do. But you’ve got to make sure that you send a countervailing signal of reassurance to Europe and the world that you’re going to hold the thing together and not let it go. [You’re] going to protect the rest of the place.” I just made very clear to them right then. You hear this blood-curdling moral hazard-y stuff from them, and I said: “Well, that’s fine. If you want to be tough on them, that’s fine, but you have to make sure you counteract that with a bit more credible reassurance that you’re going to not allow the crisis to spread beyond Greece and that’s going to require, you’ve got to make sure you’re putting enough care and effort into building that capacity to make that commitment credible as you are to teaching the Greeks a lesson…"
http://blogs.ft.com/brusselsblog/2014/11/11/draghis-ecb-management-the-…

It's basically a matter of European technocrats resolve to put the boot in with the Greek populace lying prostrate and then applying the thumbscrews in harsh punishment for their sins.