Heroin and Meth.

Planning to plan, preparing to announce, close to an agreement, a susbstantial (levered) arsenal (of more debt). My friends, Europe is on the road to recovery!  Like the heroin addict who can "kick his habit" by getting some publicly provided meth, the underlying illness goes on but we can temporarily all feel a little better. 

Anything that can't continue indefinitely must end and debt that cannot be repaid must be defaulted on or restructured, with the irresponsible parties bearing the consequences for their mismanagement and malinvestment (indebtedness). Until now, "we the public" have born the burden of malfeasance,  fiscal mismanagement, mischief and moral hazard in the form of economic stagnation from the misallocation of capital.  

We don't know if a sovereign (or bank) default will bring Mr. Geithner's “cascading default, bank runs and catastrophic risks”, certainly those are possible outcomes but almost as certainly they are not the only outcomes, and possibly they are not even the most probable outcomes, we just don't know.  Myopia has petrified us and has caused the authorities to not consider alternative solutions in which the risk takers bear their losses but depositors and taxpayers interests are rightfully safeguarded.

The choice is clear: continue to lever up, incessantly accumulating more debt, substituting / alternating meth for heroin,  or treat and conquer the illness inflicting the inevitable pain and discomfort on the addict (debtor) and his pusher (creditor).  In the first case the addict continues to live (until he doesn't) imprisoned and immobile in his addiction and in the second he recovers, probably damaged and scared, but he moves forward responsibly, unchained and knowledgeable of his errors and his opportunities.