Soros bets against Euro

[Jan Klimkowski]

The Greeks figure it out.

So the bankers declare War.

Market Ticker's Karl Denninger chronicles it well:

Ha Ha Ha: Greece Figured It Out!

I like it!

Mr. Tsipras says that, if push comes to shove, Greece can manage on its own. By not paying its debts, the country will have enough cash to pay its workers and retirees, he says. He also proposes cuts in defense spending, cracking down on waste and corruption, and tackling widespread tax evasion by the rich.

"Whatever we do, things will be difficult. But it will also be difficult at the same time for all of Europe because the euro will collapse" if Greece's funding is cut off, says Mr. Tsipras. He adds that both sides should step back "before we reach that point" and find a "European solution."

Now you're screwed Christine Lagarde, Merkel and the various ECB wonks. They figured it out over in Greece.

You have crap cards and Tsipras has a Royal Straight Flush.

Now he may be lying, but if he's not he knows that he can pay the workers and retirees -- if he walks on the debt payments.

This means he holds the trump hand. He can operate internally and tell you all to stuff it. And assuming he's telling the truth and really has run the numbers, the ECB, Merkel and the rest of the Eurozone is stuffed on trying to force anything down Greece's throat.

He also wants to nationalize the banking system. Now, if he goes further and forces a "One Dollar of Capital" standard for all banks inside Greece, then the game-playing stops but so does the systemic risk -- inside Greece.

Now what's left for the rest of Europe? They've got a problem -- a big problem. By nationalizing the banking system he flushes the private parties that would otherwise play "hand grenade" with the economy and government.

This doesn't mean that Syriza won't screw it up, of course. He might.

But it leaves the door open to solve the problem and stabilize the banking and monetary system in Greece going forward.

It's about damn time.

There is No Escape from the Bankers:

Trichet Declares War

This is an open declaration of war folks:

Europe could strengthen its monetary union by giving European politicians the power to declare a sovereign state bankrupt and take over its fiscal policy, the former head of the European Central Bank said on Thursday in unveiling a bold proposal to salvage the euro.

That's an open declaration of war and should be responded to in kind.

There is no power superior to that of the budget within a nation. None.

If other nations and firms don't like a government's expression of their sovereign power in the form of their budget they have the right to refuse to lend to it. But there is no claim one can make on a sovereign's budget on a forcible basis -- that is functionally identical to an invasion.

Trichet has just invited a shooting war in Europe, and I predict that if this sort of meme spreads he's going to get exactly that.