MATHEMATICAL CERTAINTY

Once again it didn’t work.

Last night Greece “apparently” voted to (somehow) keep to “the program” and not immediately toss all the bonds they have issued into the paper shredder and send the pieces to Merkel.

It didn’t matter. Spain’s bond yields continued to rise this morning, are at this point over 7% and the overnight rally in the futures disappeared.

There’s a not-so-silent bank run in Greece. This will spread.

In Greece, and elsewhere in Europe, there is a developing story (not yet reported) where people are simply charging everything on their credit cards and have no intention of paying any of it — ever.

This will of course get cut off (as soon as it is publicly recognized that it’s going on) and the market will revert to cash-only. And when it does, the contraction will hit the markets and the public recognition like a freight train.

This morning CNBS’ Liesman continued to play the “bazooka” game, claiming that someone “needs to do something.” He’s at least getting some pushback from the others on the set.

Well, yes, someone needs to do something.

Arithmetic has to be faced.

And arithmetic is quite simple:

The government cannot spend more than it taxes. No government. Not here, not in Spain, not in Greece, not anywhere.

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