I can't wait for Scott Sumner to start posting again.

That is all.

Shifting Liabilities

One thing that's been under-appreciated in the present Euro-debt resolution strategy: as private agents shed periphery debt and the public sector attempts to absorb the excess, the liabilities shift. After a while, all of the exposure will be inn the public sector, and that will be a very, very bad situation. Not only could that lead to further sovereign debt troubles, but it will create an enormous moral hazard in which banks expect to be able to evacuate bad bets before, unloading on governments, while evading haircuts.