IMF GREEK PULLOUT : We’re la-la-la-looking the other way….

Lagarde….no denial

Italy close to the edge as mass denial greets IMF decision

Astonishingly, although I haven’t rung the IMF myself from here (I am doing this for nothing, and I am on holiday) a Washington source tells me that she spoke to their press room yesterday, and ‘off the record’ a source confirmed that the Fund’s Board “now thinks it extremely unlikely that it would be able [legally, due to its articles of association] to take part in any second Greek bailout.”

It seems that anything below a 60% haircut for the lenders on Bailout 1’s terms will be seen by the IMF’s boffins as guaranteed to lead to default – and thus the loss of both sets of IMF money ploughed into the Athenian Black Hole. As both yesterday and today Greek bondholders have reiterated their view that 35-45% is the absolute top whack they’ll go to, this does indeed mean that Greek Slushfund 2 is off….and Greece will default during November – that is, within the next 3-4 weeks.

Has any of this permeated the eunatics? It would seem not. They’re talking about bank recaps in the region by June 2012, but the dam’s about to burst within 30 days: WTF are they on?

“As you predicted, Italy is the key now,” one EU-based credit manager emailed me this morning, “If the leaders of the EU can’t save Greece, or shield Italy from the contagion, then it’ll be a shitstorm like you never saw. And if the IMF isn’t bluffing, then it’s all over already. Will the lenders fold their hand? I can’t see that happening”.

The EU bigwigs will never reach an accord that stands any chance of stopping the disaster now. As I posted two weeks back, Events will end this crisis. The event, I suspect, will be a rapid acceleration of the Italian mess, followed in short order by Greek default. The likelihood of this outcome may or may not be apparent to the Bundestag by tomorrow’s EFSF boost debate there tomorrow. If Merkel fails to get backing for it, it’ll all be over by next week. If she wins, it’ll all be over by next month.

In this context – the real world – I wonder how many Sloggers spotted the Troll comment yesterday about the site being ‘the most depressing place on the web’ and full of ‘world-weary cynicism’.

You have to laugh. One day an asteroid will approach the planet on collision course, and Lord Manglesum, Advisor to the Global Government, will accuse astronomers of “Talking Earth Down”.

More when I can get to wifi that works.