Academic

Greece Trouble Deepens

By Kim Krawiec

 WSJ: Greek Debt Crisis Seen Getting Worse:  Financial-Aid Needs Could Top $100 Billion, Bundesbank Chief Tells German Lawmakers; Athens Readies T-Bill Offering

Business Week: Greece Debt Swaps at Record as Icelandic Ash Smothers Aid Talks

The Economist: Greece's sovereign-debt crisis: Still in a spin -- A rescue by the European Union and the IMF has given Greece some breathing space. But much more may need to be done to avert eventual default

And, via Calculated Risk:

From the NY Times: Greek Debt Unsettles Bond Market

From Bloomberg: Weber Said to Tell German Lawmakers Greece May Need More Aid

An interview with German Finance Minister Wolfgang Schäuble in Der Speigel: 'We Cannot Allow Greece to Turn into a Second Lehman Brothers'

Shocking news.  Who could have predicted?  Time for a replay of Lee Buchheit?s Parable of the Second Engine from my April 11 post:

I asked him [Lee] about The New York Time?s report that European leaders sought ?to quash any doubts about their resolve to help Greece,? by offering a one-year aid package of up to ?30 billion.  Isn?t this so far removed, I asked, from what Greece actually needs to make a go of it that it?s just throwing money away?  Why do this?  Do they really think that?s enough?  Or is this just a political move designed to make it look like Europe actually tried to do something, rather than standing by watching Greece tank? Is there something here that I don?t see?   In response, Buchheit told me The Parable of the Second Engine:

Some years ago my brother started to take flying lessons.  He trained on a single-engine aircraft.

"But surely brother mine", I said to him one fine day, "it is safer to train on a two engine aircraft in case one engine stalls".

"Lee", he responded in that tone of voice employed by all elder brothers when speaking to their siblings, "if one engine were to stall in an aircraft being flown by an inexperienced pilot, there are so many adjustments the pilot would have to make all at once that the utility of the second engine will merely be to fly everyone to the scene of the crash".

This 30 billion, and even perhaps the 30 billion after that, may wind up performing the function of the second engine.

Related Posts:

Greece: Argentina, Uruguay, or Twin Engine Plane?
Greece Updates: You Can't Blame The Mirror For Your Ugly Face?
Blame It On Derivatives, Blame it On Goldman Sachs, Blame It On the Nazis. But Don?t Blame the Greek Crisis on Greece??
The Greek Crisis: Economic Meltdown or Mental One?????
The Modern Greek Drama: Comedy, Tragedy, or Both?  ?????
The Modern Greek Drama, Part 2 ????
Verge of the Unböring (The Modern Greek Drama, Part 3)????
Is 2010 The Year of Odious Sovereign Defaults?

 Image source:  http://greek.debt.crisis.suckered.us/ 

Full post as published by The Faculty Lounge on April 20, 2010 (boomark / email).