William J. Holstein

Guess Who Is Producing This Greek Drama?
APRIL 28--The same institutions that created the mortgage mess in the United States seem to be whipping up hysteria over a possible Greek financial default. The media is meekly playing along. I suspect that there are fortunes being made at the expense of the Greeks, Europeans and everyone else who has a stake in the stability of the global financial system. It is reminiscent of the bear raid that financier George Soros once staged on the British pound.

Just looking through today's newspapers, who is arguing that Greece's mismanagement of its economy, which is trivial in the global scheme of things, is about to bring down the European Union? Let's see. Here is Standard & Poor's downgrading Greece's debt to junk status. Why would anyone believe anything that S&P has to say about Greek debt? Haven't they and the other rating agencies being thoroughly discredited?

Who else? Oh, here is Stu Schweitzer, a global market strategist at J.P. Morgan Private Bank in New York. He's quoted in the Wall Street Journal as saying, "Investors are increasingly thinking about the risk of the unthinkable in Europe. The concern is contagion." What is J.P. Morgan's position regarding Greek debt and European markets in general? It wouldn't surprise me if Morgan had bet billions against Greece and against Europe. But they don't have to disclose that, and the hapless Wall Street Journal reporter doesn't think to ask.

Then here is Jacques Cailloux, an economist at Royal Bank of Scotland, also describing the "shock" to Greek banks if they bolstered their balance sheets. I'm sure that would be a jolt, but why does anyone think that the Royal Bank of Scotland has any real insight. They were complete fools during the U.S. housing bubble and lost heavily. It's easy to imagine that they see a profit opportunity in the Greek drama and are betting billions, in hopes of making quick gains.

I'm not saying the Greek finances are not a mess. They are. But they've been that way for decades. Why is this crisis being whipped up now? Who is benefitting from it? Those are the questions I'd like to see the media take on.