Recent chatter during the past few days has theories of Greece leaving the EZ and its currency....again. Part of the theory would require that between a Friday close of Wall St. and before the opening of markets in New Zealand, would allow 46 hours to do the whole deal, including all of the needed functions of establishment of the drachma, reset all of the Greek banks..............and blah, blah.
I don't find this as a reasonable situation and find that a formal plan would have to be in place that may require at least two weeks of work.
--- Worse case scenario...........either way.
Greece stays in the EZ........their debt is still worthless and is an entry in an electronic file of the ECB and countries holding the trash. If Greece leave the EZ, the electronic debt is still trash. Portugal, Spain, Ireland and Italy would monitor the reaction to such an event of Greece leaving the EZ; and have their own considerations. Germany in particular will not likely allow for a large debt into their own country to help Greece stay in the EZ; which would also likely cause inflation in Germany............but not from a growing economy.
Regardless of who stays or goes, much of the debt is nasty paper; and in the best situation of a fix, will take many years to paydown or unwind.
Some in Europe have mentioned offering an ECB bond. Duh, what will this do? Nada, in my opinion. These would only be fresh manure piled upon the old manure; but it is still a manure pile, only larger.
If a perceived magical temporary fix arrives from the current Euro conference now in place. The equity markets could rally as those with shorts against these markets sell their shorts. When the upmove causes enough new value to be reaped, down come the equity markets again.
I see large capital letter WWWWWWWW's for the markets charts for the remainder of this year. The high and low points of the WWWWWW's will come from the traders and machines.
In the longer term, if Greece and others leave the Euro; at least they will be able to compete to some extent with any exports against stronger currencies. The hurt would come from whatever they had to import to survive; paying the big dollar/Euro. How many new Drachma would be required to buy any type of fuel needed in Greece?
Lastly, cracks have finally appeared over the past several days in the Euro versus $. Euro's are traveling somewhere away from perceived real danger; in my opinion.
What say you?