Greece propped up March 12, 2010 at 6:33 am

As I expected, given the primarily political rather than economic character of the Euro project, Greek has been propped up.

Propping up the Parthenon

This is both rational on a standalone basis, and as a signal to the markets. If Greece had defaulted, the pressure would have been huge on the rest of the the PIIGS. Sell one year first to default protection on Portugal, Ireland, Italy and Spain before the spreads come in too much.

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