Greece has defaulted but still does not look good for the PIIGS

As markets expected the PSI results triggered a Credit Even and Greece has officially defaulted. The final number for the participants was of 83.7% for all Greek bonds. The split was 69% for Foreign Law bonds and 85.8% for Greek Law bonds. Here are more details about the credit event.

Do you think Italy listened to Milton Friedman?

In 1999 Milton Friedman wrote a letter to Antonio Martino, a founding member of Forza Italia (my highlights):

“Your views and mine are currently very much the same on the euro. . . . What most troubles me as it does you is that members of the euro have thrown away the key. Once the euro physically replaces the separate currencies, how in the world do you get out? It’s a major crisis. As a result, I would strongly agree with your view that the euro should be abandoned before January 1, 2002. At the same time, the odds are very great that it will not be abandoned. The defects of the euro will take some time to show up; nothing happens very rapidly in this area. There are fewer than three years to go. Even if difficulties deriving from the euro occur in those three years, the political system is unlikely to react quickly enough to end the euro. As a result, I think it would be very desirable for some systematic thought to be given to devising some way to get out of the straitjacket of the euro after 2002. The least Italy should do is to keep intact the plates which are used to produce lira.”