There's One Key Phrase To Help You Understand Where Greece Is At

Local Papademos

Photo: AP

OK, so any hope of a Greece deal before the Asian markets close is off.According to the FT, talks will resume on Monday.

There’s really one key dynamic to understand here…

You know the phrase: “If you owe your bank a thousand dollars, then you’re in trouble, but if you owe your bank a million dollars, then youre bank is in trouble.”

Well for a long time, Greece was in the latter half of that, owing a ton of money, but seemingly holding all the cards, as a Greek bust threatened to take down the entire system.

But European leaders aren’t afraid anymore. They’re willing to tell Greece to take the hard choices, and that if they don’t want to do it, then the option is bust. The success of the ECB’s LTRO probably has a lot to do that. So all Greek talks are internal: Will leaders accept more hard choices or not. The international community isn’t so worried.

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