Day: May 15, 2012

Tuesday, 15 May 2012

07:48 – I’m working on the final lab session in the forensic biology group, on separating DNA with gel electrophoresis. That’s the final lab session, other than the one that I skipped back in the soil analysis group, on chemical characteristics of soil. For that one, I intend to do a quantitative analysis of phosphate using the molybdate test. I’ve never done that one, or if I have I don’t remember doing it, so I need to mix up some reagents and do the reaction several times under different conditions to make sure things are reproducible before I write up the lab.

Barbara’s firm is having an employee night at the stadium tonight. If it’s not rained out, she’s going to baseball game; if we have another deluge–we had 6 inches (15 cm) of rain yesterday–she’ll just hit the gym as usual.

11:33 – A year ago, I said that Greece reminded me of that scene in Blazing Saddles where Bart takes himself hostage with his pistol to his head, threatening to shoot unless his would-be lynchers backed off.

That worked for Bart, and it’s been working for Greece for a year now. Each time the Troika tried to force Greece to implement realistic measures to deal with its debt crisis, Greece refused, with the implied threat of defaulting on monies owed to EU banks, the ECB, the IMF, and other government and quasi-government entities. The EU, of course, never really cared if Greece defaulted on monies owed to private creditors. In fact, the Troika forced through the short-sighted private-sector involvement, whereby private investors were forced to take an immediate 75% write-down on the debts owed them, in return for new Greek bonds valued at a nominal 25% of the debt Greece actually owed. (Of course, those “new” Greek bonds, issued in March 2012, are now worth essentially nothing.) But the Troika made sure of the important part; that Greece continued to pay the debts owed to the Troika.

Well, it’s now obvious to everyone that those debts will also have to be written off. Actually, it’s been obvious for a long time, but EU leaders are just getting around to admitting it publicly. And, with Greece’s departure from the eurozone and return to the drachma no longer in any doubt whatsoever, Greece no longer has that threat to hold over the Troika’s head. That means no more money from the EU, the ECB, and the IMF, which means Greece must default (again) the next time a significant bond payment becomes due. That won’t be long.

Meanwhile, the EUrocrats are, as always, living in a dream world. They believe–just how catastrophically wrongly will become obvious very soon after Greece defaults–that “contagion” can be avoided. This despite the fact that Spanish 10-year bond yields are higher now than they’ve ever been since the euro was introduced, with Italian bond yields not far behind. When Greece defaults, the bond market will immediately shift its focus to the other weakling eurozone countries, namely Spain, Portugal, Italy, and Ireland, with Belgium and France not far behind. Many people, including me, have made reference to a toppling row of dominoes, but in fact the impending catastrophe is more likely to resemble a house of cards, with the whole mess collapsing in one huge pile. I hope Germany has done as I speculated they’ve been doing, printing new marks and getting ready to change back to their old currency overnight. Otherwise, even Germany won’t escape the collapse.

The EU succeeded in putting off the collapse for a year now, but at hideous cost. I am reminded of that famous film clip of the catastrophic failure of the Tacoma Narrows Bridge, caused by positive feedback. Everything, and I mean everything, the EU authorities have done for the past year has been positive feedback in terms of the effect on the euro, which, like the Tacoma Narrows Bridge, was fatally flawed at the design stage. Ultimately, the result will be the same.

16:31 – Now that Merkozy is no more, with Francois Hollande replacing Sarkozy as the French president, we needed a new name for the French partnership with Angela Merkel. Apparently, Frangela is out to an early lead. I think my proposal is much better. Merde.

16:44 – Oh, my. The day has been full of bad omens for Greece, if you believe that sort of thing. First, Hollande’s plane was struck by lightning on its way to Berlin. Then, in a story eerily reminiscent of Harry Chapin’s 30,000 Pounds of Bananas, a tractor-trailer crash in upstate New York has spilled 36,000 pounds of yogurt. Greek yogurt.

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