Ambrose Evans-Pritchard wrote a thought-provoking article today: Germany isolated as Latin Bloc calls the shots. The theme:

The eurozone’s ‘Latin Bloc’ is in full revolt. The trio of French, Italian, and Spanish leaders – backed by world powers – are to push for a radical shift in Europe’s economic strategy at crucial summit on Wednesday.

There are key issues that would be addressed that would forestall, at least fore a time, the downward slide of the EU towards dissolution. We discuss these below.

In recent posts, Jean-Claude Juncker: Greece to Leave Euro Area! and The Socialist Revolution Has Begun, we discussed the likelihood of a Greek default and exit from the eurozone. Today, Andrew Evans-Pritchard puts some initial estimates on the impact of this event. We explain the implications.

Recall Quote of the Day: 20111209 whereby Jean-Claude Juncker stated “When it becomes serious, you have to lie.” Today, Mike Shedlock reports Mr. “Lie When It’s Serious” Juncker Tells Another Whopper: “I Don’t Envisage, Not Even for One Second, Greece Leaving the Euro Area”; Two More Days of Hopefully Futile Coalition Talks on a “Government of Personalities”.

So if Juncker says “I Don’t Envisage, Not Even for One Second, Greece Leaving the Euro Area” and leaving will be very serious to catastrophic as is widely reported*, then Greece is leaving the Euro Area.

We have had conversations lately with family and friends in which we referenced the nature of economic and geopolitical news that we have been reporting on since we began this blog 6 months ago. It has been unmitigatedly bad.

What does appear as ‘good’ news is often a temporary reversal in some negative trend. The US price of gasoline recently dropped 10 or 20 cents. That belies the fact that it is still at nosebleed levels and that the price of oil, and therefore gasoline,  is headed higher this year – even without a Mideast war (and we barely cover geopolitics).

We recently saw some housing stat about an increase in building permits or sales or something. But then we read an article such as Foreclosure Inventory = 103 months (that’s 8.6 years of overhang. How do prices and how does the home construction industry recover with a situation such as this?). Most of this stuff we simply don’t comment on or report.

We do report the major trends. We track with specific and regularly updated posts, recessions, ratings downgrades and the major events in countries that are blowing up like Spain and Japan (Greece we don’t even bother with in its zombie state). The point politicos and economists alike seem to fail to grasp or certainly voice, is that until we admit we have a serious problem and embrace the pain any solution will require, we cannot move towards a brighter future. So things continue to worsen.

Indeed, the single piece of good news that we could recall was the upgrade of Iceland. The real irony here of course is that Iceland, the first country to default in the current (since 2007) crisis, defied the dictates of the EU, and the governments of the UK and the Netherlands (and their own government!) through a referendum of the people. They gave the middle finger to the collective wisdom of the ruling elites and the their economists and are now doing quite well thank you.

Here’s their genuinely good news story.

We have several posts tracking isolated aspects of the overall European economy. These include Placing Spain on Deathwatch, Tracking The Downgrade of Europe (and Others), and Tracking the Next Recession. Today’s post by Mike Shedlock, Eurozone Retail Sales Plunge at Strongest Pace Since Late-2008; German Retail Sales Plunge Into Contraction; French Retail Sales Plunge at Record Pace; Record Job Losses, Record Retail Plunge in Italy, gives a more comprehensive picture of the economic situation there. Basically, the entire European economy is slowing down. This will move countries not already in recession, towards that state. None of this is good for a financial crisis who’s only hope of a solution other than default, is vigorous economic growth.

The Great European Train Wreck continues in slow motion.

The higher context is the global economy. The decision by the BoJ to print 5 trillion yen shows that Japan’s economic problems continue (forever it seems). In the US, Q1 GDP at 2.2% missed estimates of 2.5% by a mile showing all is not happy with that economy (a late report suggests a Q1 GDP number of zero: GDP Miss Far Bigger Than Announced; Real GDP is 0% Using More Reasonable Deflator). These are not isolated occurrences. With global trade and money flows, they all feed into each other. The risk is a self-feeding downward spiral. And central banks around the world are left with tools that can only exacerbate the problem, not fix it.

We first alerted readers to the financial war being waged against Greece in the post: The Occupation and Looting of Greece, Twenty-first Century Style

Courtesy today of Zero Hedge and the Athens News, we now hear that the first German occupation battalion is being formed:

More than 160 German financial services executives are willing to come to Greece in order to strengthen the Greek tax mechanism

On a broader front, the EU is also marshaling troops to occupy Greece. The online news source Global Finance, reports that Olli Rehn, European Commissioner for Economic and Monetary Affairs, announced that:

the European Commission, the EU’s executive arm, would be installing its own officials at Greek ministries to provide technical assistance and monitoring on a permanent basis on the ground in Athens.

Related Posts

• The Occupation and Looting of Greece, Twenty-first Century Style

We have been hearing for months now, that a Greek default would spell financial Armageddon for the European and global economies. Such statements have rarely been supported by any kind of reasonable argument or evidence. Instead, the mainstream media (MSM) numbly parrots what they have been spoon-fed without any evidence of cognitive activity in the process. So let’s look at the claim.

The Teutons are sacking Greece! Led by German finance minister Wolfgang Schnabel, the European Union and associated governing tribal bodies are imposing Draconian fiscal measures on Greece in an effort to recover as much as possible of the large sums irresponsibly invested in Greek banks and sovereign bonds by their national commercial banks

Or as Ambrose Evans-Pritchard reports, Alexis Tsipras, the Syriza [party] leader, told the Greek parliament on Tuesday that his country was victim of a “terrorist” assault.

Make no mistake about it. There is no concern for the Greek people. There is only concern for rescuing their banks and the wealthy elite that made bad investment decisions, prompted by greed.