part 2

3. The Greece crisis which was declared 3 times at least as finished by the highest EU officials keeps coming back to the ultimate point - default ( if they are smart). even if EU and IMF buys them time for a little while it has reached the status quo of Argentina. Leaving the EURO and declaring default in order to renegotiate with its debitors a 30 cent on the EURO deal would be the only sane thing to do. Especially as it has tourism as one of the biggest assets leaving the expensive currency could bring tourism to their shores. The problem rather is that such a move would bring many EU banks in big trouble as they would have to write off 70 % on the equivalent of 300 bil. outstanding debt mostly hold by German and French banks. Plus a default would trigger adjustments on more problematic sovereign debt triggering balance cheat adjustments of hundreds of billions. That is why Greece will be 'saved' formally for now and Greece Mainstreet will pay the price.

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Game Over: EuroStat News Blows Up Greece - 3 Year Spread At Ridiculous 870 bps, CDS Hits Record 806

We warned you (here and here). EuroStat reports that the Greek budget was really 13.6% of GDP and the Debt/GDP is more like 115.1%. Greek bond spreads explode to a ridiculous 562 bps on the news, 3 years are at 870, and CDS is at 806.

From Reuters:

Greece and Ireland had much larger budget deficits last year than expected and the Greek data may be revised further due to its unreliability, the European Union's statistics office said, sending the euro lower.

"It looks like a terrible situation just got worse," said Nick Kounis, economist at Fortis.

Greece, now negotiating a three-year emergency loan package with the European Commission, European Central Bank and International Monetary Fund, had a gap of 13.6 percent of gross domestic product, rather than 12.7 percent as reported earlier, Eurostat said.

But the deficit may turn out to be even higher.

"Eurostat is expressing a reservation on the quality of the data reported by Greece, due to uncertainties on the surplus of social security funds for 2009, on the classification of some public entities and on the recording of off-market swaps," Eurostat said in a note attached to the data.

"Following completion of the investigations that Eurostat is undertaking ... in cooperation with the Greek statistical authorities, this could lead to a revision for the year 2009 of the order of 0.3 to 0.5 percentage points of GDP for the deficit and 5 to 7 percentage points of GDP for the debt," it said.

Greek government bond prices and the euro fell after the data with the Greek/German 10-year government bond yield spread up at 542 basis points from around 516 bps at Wednesday's settlement, surpassing the previous peak of 532 bps as the 10-year Greek yield hit a new high of 8.5 percent.

"What concerns me is the general uncertainty about the Greek official figures. This affects market perception about Greece ... that one can't rely on the Greek statistics and that the deficit is revised up and up and up," said Giada Giani, economist at Citigroup.

The euro fell to around $1.3372 from around $1.3410 before the data.

4. The perversion is rather that Dodd and Shelby are 'negotiating' - since this 2 gentleman have been the biggest lobbyists for bank deregulation with Frank and are now pretending that they fight against greedy banksters.
At the same time Obama prepares the public for the next rape of Mainstreet this time by government as posted earlier as well VAT is a given.

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Obama suggests value-added tax may be an option

By CHARLES BABINGTON, Associated Press Writer Charles Babington, Associated Press Writer – Wed Apr 21, 7:14 pm ET

WASHINGTON – President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, "I want to get a better picture of what our options are."

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding "sense of the Senate" resolution that calls the such a tax "a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery."

For days, White House spokesmen have said the president has not proposed and is not considering a VAT.

"I think I directly answered this the other day by saying that it wasn't something that the president had under consideration," White House press secretary Robert Gibbs told reporters shortly before Obama spoke with CNBC.

After the interview, White House deputy communications director Jen Psaki said nothing has changed and the White House is "not considering" a VAT.

Many European countries impose a VAT, which taxes the value that is added at each stage of production of certain commodities. It could apply, for instance, to raw products delivered to a mill, the mill's production work and so on up the line to the retailer.

In the CNBC interview, Obama said he was waiting for recommendations from a bipartisan fiscal advisory commission on ways to tackle the deficit and other problems.

When asked if he could see a potential VAT in this nation, the president said: "I know that there's been a lot of talk around town lately about the value-added tax. That is something that has worked for some countries. It's something that would be novel for the United States."

"And before, you know, I start saying 'this makes sense or that makes sense,' I want to get a better picture of what our options are," Obama said.

He said his first priority "is to figure out how can we reduce wasteful spending so that, you know, we have a baseline of the core services that we need and the government should provide. And then we decide how do we pay for that."

Volcker has said taxes might have to be raised to slow the deficit's growth. He said a value-added tax "was not as toxic an idea" as it had been in the past.