The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
Subscribe to the Flinchum File
View Archives

Still in the Rear View Mirror


When a deal falls apart after the handshakes, you can usually blame the lawyers.  You may have thought the Greek bailout was behind you, and Europe was now focused on the bigger problem of Eurobonds to bailout the whole of Europe.  You would be wrong, unfortunately.

The bailout of Greece will NOT happen, and the fault goes to the Tea Party of Finland.  Enraged that the profligate Greeks were being bailed out with the savings of hard-working Finns, their Tea Party has doubled their representation in Parliament and has forced the government to demand cash collateral for the Finnish funds loaned to Greece.
Of course, if the Greeks had the cash for collateral, they wouldn’t need to borrow money from the Finns.  Now, the Finns are demanding real estate as collateral.  The Greeks have been trying to sell that real estate to pay off their debt to everybody. 
Even worse, other nations are demanding that all creditor nations be treated the same and are beginning to demand collateral as well.  Germany and France are pushing back, but we know the Tea Party doesn’t compromise.
I expect Finland to drop out of the deal, as well as a few other nations.  That increases the burden on German and French taxpayers, who will understandably not be happy.  This is likely to force the Germans to act more unilaterally, while demanding more fiscal sovereignty over all of Europe.  If you don’t like the way European headlines have whip-sawed U.S. stock markets so far, don’t look in your rear view mirror.

We are a fee-only advisor providing best interest fiduciary services to clients
in Chesapeake, Newport News, Norfolk, Suffolk, Virginia Beach, Williamsburg, and the surrounding areas of Hampton Roads.


Contact Us Bottom