As markets were relatively buoyed around the world by hope that Greece's debt woes could be managed, analysts warned that the contentious debt exchange exercise could create a new problem in the dangerous debt crisis plaguing Europe.
"The idea of Greek default transformed from being a Greek punishment to a gift with the pending question: 'If Greece doesn't have to pay, why do I?' — threatening a far more disruptive outcome that is yet to be fully discounted," Warren Mosler, a distinguished trader based in the Virgin Islands, wrote on his website Mosler Economics.
"That is, should Greek bonds be formally discounted, the consequences of merely the political discussion of that question will be all it takes to trigger a financial crisis rivaling anything yet seen."
Read it at The Lost Angeles TimesGreece bond exchange the largest debt restructuring in history
by Anthee Carassava, Los Angeles Times, Athens
(h/t Roger Erickson at mmt-discuss Google group)
Short article, big plug for Warren!