Con men and morons take victory lap for extending Greek pain.

In a move that is about as surprising as U.S. government's re-raising of the debt limit, the Wall St Journal reports that a new deal has been reached to keep Greece in the con game of global debt.  Of course in order to sell the deal, concessions had to be made: private bondholders would have to agree to a partial default on the loan.  Of course the euro-cons make it sound like the debt reductions are all voluntary (happy even) but there really is no choice for the bondholders because something is better than nothing.  In addition, interest rates on the debt have been pushed down to 3.5% and repayment extended to 30 years.

And so the con men are out patting themselves on the back as if everything is just fine.  But everything is not fine.  Unless Greece can inflate away its debt to pensioners (which it can't since it doesn't control its own currency anymore), it will run a massively deficit government no matter how they reswizzle the existing debt.  Nothing has been saved or fixed.  The con men are just buying whatever time they can. The next step in the collapsing con will likely be the declaration of sovereign Greek bond default by the US credit rating agencies.  If they don't do it they can pretty much just close up shop and let the up and coming Chinese debt rating agencies control the game going forward.  The paper thin credibility of S+P and Moody's requires them to declare this situation a default.  Those who are holding credit default swaps will demand that it be so.  If government steps in and tells these people to play ball or else then it will destroy the credit system over time.  Why would anyone loan money to a government if they can't insure such investments with credit default swaps?

If the Greek people are stupid enough to let their rulers do this in their names then they deserve to become life long debt slaves.  I don't think that is going to happen.  I can already smell the Molotov cocktails being mixed up in Greek basements.  The Greek politicians will keep agreeing to debt pushouts and reswizzles because they know they cannot repay the debt.  But as long as there appears to a chance of success they can get people to continue to buy into the con.  The only real goal of the politicians.