There are few shoes to drop and dominoes to fall in next few weeks.

By Daniel at 29 November, 2009, 3:38 am

Eastern Europe like Hungary and Ukraine who binged on Euro and USD loans comes into mind. Add our southern neighbor Mexico too. I read that a country going into default actually is welcomed within by the population and certainly stoked with socialist and populist twist.

And just like many people snubbing at the banks and refusing to pay their mortgage for months till they get kicked out - it has become acceptable and fashionable to boot. And why not? Hussein’s economic policy is privatize the profit and socialize the losses.

$10k question is how much does IMF have to lend and will the countries contribute more to IMF for future rescues.

After Dubai, Greece could be the Next

“Euro membership blocks every plausible way out of the crisis, other than EU beggary. This is what happens when a facile political elite signs up to a currency union for reasons of prestige or to snatch windfall gains without understanding the terms of its Faustian contract.

When the European Central Bank’s Jean-Claude Trichet said last week that certain sinners on the edges of the eurozone were “very close to losing their credibility”, everybody knew he meant Greece.

The interest spread between 10-year Greek bonds and German bunds has jumped to 178 basis points. Greek debt has decoupled from Italian debt. Athens can no longer hide behind others in EMU’s soft South.

“As far as the bond vigilantes are concerned, the Bat-Signal is up for Greece,” said Francesco Garzarelli in a Goldman Sachs client note, Tremors at the EMU Periphery. “