Greece is done. They've defaulted in principle and will soon default for real. You can't pay credit card rates on short term bonds and survive. Dittos for Portugal for the same reasons. And Ireland.
Those are not the reasons why I'm not worked up about all the jawboning in DC. Those guys are all small potatoes and can be dealt with by a monstrous printing spasm at the ECB, should they choose.
Italy and Spain could be next. Italy in particular. Ignore all the condescending economists, sniffing at you over the tops of their pince-nez, telling you that while Italy has a debt of 120% of their GDP, they're not in any real trouble because (insert long, technical, undecipherable econobabble words here).
Italy is now paying about 5% on 5-year bonds and that number is going up, not down. There is no growth on the horizon and there is nothing left to squeeze out of the Italian taxpayers so there is nowhere on the revenue side to get the cash they're going to need to just service their debt.
If Italy can't get out of this one then they can't be saved. Their economy is simply too large bail out with another convulsion of Euro printing. I'm less familiar with Spain, but as I understand it, they're close to being hosed, too.
The world is changing. The progressives spent the future and the future is currently at the door, knocking and asking to come in. The game is ending. Obama doesn't want to cut spending? Obama doesn't have a plan? Good for him. Let's see what people have to say when European banks start to go under and take lots and lots of US bank money with them.
The debt ceiling yackathon? To borrow from Obi Wan Kenobi, "This is not the fiscal crisis you're looking for."
