"With this trip, I think the Secretary will bring the message that time is running out and this is the last chance the Europeans have to fix the situation before we have a full- blown systemic crisis," said Domenico Lombardi, a former International Monetary Fund board member who is now a scholar at the Brookings Institution in Washington.
"I think the U.S. tone will be much more firm - it has changed from being more interlocutory to more authoritative," Lombardi added.One last try from Geithner now. Perhaps he will re-iterate the recent suggestion by President Obama simply for the Central Bank to buy government securities in a time of crisis such as we are witnessing.
Any type of Eurozone solution that includes "managed defaults" of sovereign debt would include pre-arranged European fiscal actions to allow the European institutions to continue to operate. However, if such "defaults" resulted in large and potentially solvency disrupting losses to US institutions, the fiscal actions required to remedy those losses for US institutions would not be so easily forthcoming, given the US political environment with respect to "bailing out the banks again". Geithner is probably over there primarily to defend US institutions against this outcome; an "MF Global" redux across all TBTFs.