IMF Urges Private Sector Help In Europe Debt Crisis, Warns Of Default Risk!

LOL! Oh WOW! They want private investor's to take a GAMBLE and put their money in HIGH RISK INVESTMENTS. JUST WOW! HIGH RISK as in JUNK BONDS!!! And these are the people who like us to believe they are the "INTELLIGENTSIA" of the world! Hahahahahaha... WOW! They are just digging the hole deeper and delaying the inevitable. So now they're saying come on, let's all fall together. How many times has Greece been bailed out already to prevent a default and they still haven't put their house in order?!?! How can you in good conscience ask private investors to help them out?!?! How long do you intend to maintain this ponzi scheme before it literally blows up in all of our faces?!?! You know, I wish we could have the opportunity to review the investment portfolio's of those people in positions of power to see if they are putting their money where their mouth is.

I hope the IMF and the EU don't follow in President Obama's footsteps and screw the general taxpayer. What am I talking about? Oh the democratically controlled congress and senate both passed the PPIP and TALF and President Obama signed these two bills into law right after he took office in March 2009. PPIP and TALF basically guarantee profits for private investors, with the federal treasury putting up the majority of the investment ergo using taxpayer money to buy up toxic assets (JUNK) and the private investors making away like bandits. Asset managers were eager to join this new government welfare program at the expense of the taxpayers and why not? They had absolutely nothing to lose and a heck of a lot to gain!!! This is what has been propping up our economy in the short term. Yet another MORAL HAZARD!

“Oh what a tangled web we weave,

When first we practice to deceive”

~ by Sir Walter Scott

(Scottish Novelist, Poet, Historian and Biographer, 1771-1832)

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The Wall Street Journal

UPDATE: IMF Urges Private Sector Help In Europe Debt Crisis, Warns Of Default Risk

written by Ian Talley and Matthew Cowley

Friday June 17, 2011

• IMF warns that failure to provide outside financing to peripheral Europe risks defaults
• IMF calls on private sector involvement in financing help
• IMF urges Europe to commit to 'full assurance' on financing

(Dow Jones)--The International Monetary Fund for the first time publicly Friday called on the private sector to help finance Greece and other European peripheral countries, warning that failure to help fund the ailing economies could force sovereign debt defaults and risk derailing the global recovery.

"The stakes are very high," said Olivier Blanchard at a press conference in Sao Paolo, Brazil.

"Failure to commit and implement policy or failure to deliver on financing hold the risk of triggering disorderly financial and sovereign defaults," he said.

Rising opposition in Greece over bailout terms and impasse among European officials over how to finance Greece's funding needs have increased the possibility that Greece will default on its debt obligations and contagion will spread to the rest of Europe.

For the first time publicly, the IMF urged private bondholders to help out.

"Certainly, the private sector involvement question is on the table," said Jose Vinals, the fund's head financial counselor. "What we hope is that at the end of the day, there would be an agreement on how to combine a number of elements that are fundamental to solve the Greek issue in a lasting manner," he said.

Amid pressure by Germany to include private sector in the financing solution--specifically either a forced or voluntary rollover of debt, extension of debt maturities, or a revaluing of the debt--Blanchard said peripheral Europe "require help and outside financing both official and private... It's clear that these countries cannot get out of the hole alone."

He declined to elaborate what the IMF envisioned for private sector involvement, but said there were "many options on the table."

German and French officials said they were near to reaching a deal on including voluntary debt rollover of Greek bonds, but it is still unclear to what extent, if at all, private bondholders buy in to the idea. There have been no publicly announced meetings between authorities and bondholders.

Without outside financing, "contagion through various channels through the rest of Europe then holds the risk of derailing the European recovery and perhaps even the world recovery," Blanchard said.

Vinals reiterated the IMF was prepared to assist Greece, but still needed "full financial assurance" from Europe. He said he was hopeful that euro-zone officials would reach an agreement to commit on financing at upcoming meetings.

"We are very much hoping that all the pieces fall into place, so we that can continue to go along with the program," he said.

Officials are working towards a political agreement committing to provide financing to meet a growing gap in Greece's funding needs beyond the current EUR110 billion bailout program, allowing the IMF to approve a delayed tranche of cash in early July. A debt bill is due for Athens in mid-July, making an accord more urgent.

And against the backdrop of massive protests in Athens and turmoil in the president's cabinet, Blanchard said Athens now has to convince the country that these adjustment policies are needed. "There is basically no alternative to taking these policies," he said.

Blanchard warned, "In the best of cases, improving competitiveness and returning to fiscal health in some of these countries will be a long an painful process."

"It will require strong policies, in some cases fiscal consolidation, structural reforms, and policies which protect the most vulnerable," he said.