Firms' "contingency For Euro Legacy Currencies And Break Up"

[inflating]

http://online.wsj.com/article/SB10001424052970204449804577068092184234390.html

Nomura warned clients to check the fine print on their euro-zone bonds to gauge whether their assets would remain in euros or potentially a legacy currency in case of a euro-zone breakup. A number of other banks have also warned clients that a breakup is possible.

http://uk.reuters.com/article/2011/11/29/uk-euro-zone-contingency-idUKTRE7AS0H220111129

It is not alone in carrying out 'war games'. A senior banker at a large investment bank said he had a team of 20 people globally running all kinds of scenarios all the time. That team was now spending a lot of its time on the possible break-up of the euro.

The FT also mentions this in its lower front page article

[Guest Control]

This is the holy grail, the mother-load, the big kahuna of popcorn moments if it comes. There is not enough corn kernels on the planet to satisfy the demand for popcorn this event would create. Time to go long on corn producers. Just in case.

[Chuffy Chuffnell]

This is the holy grail, the mother-load, the big kahuna of popcorn moments if it comes. There is not enough corn kernels on the planet to satisfy the demand for popcorn this event would create. Time to go long on corn producers. Just in case.

[The Masked Tulip]

The FT also mentions this in its lower front page article

The basement is what the bottom of the page is called in newspaper palance. You have learnt something new, as did I when I heard the Editor of the FT mention it earlier tonight.

[Democorruptcy]

The basement is what the bottom of the page is called in newspaper palance. You have learnt something new, as did I when I heard the Editor of the FT mention it earlier tonight.

Did you hear him say the autumn statement means we are going to have an extra 2 years of pain taking it to 7? As if that's it and then it's all sorted.

The editor of the FT does know the difference between deficit and debt doesn't he? We have another 2 years of increasing the debt. So that's even more debt to service even if the deficit did get to zero. There is never a plan mentioned to reduce the debt.

[copydude]

I've read a few of these reports recenly - where financials are testing back office systems.

There seems no solution though how a country actually extricates itself from the Euro in the first place - exit, borders, exchange controls and such things are technically illegal for member states.

Just this past week, I have read variously that the 'big bazooka' will be reloaded, the IMF will bail Italy, Poland will convince Germany to spend what it takes . . . all either denied or opposed. The EU has re-presented Eurobonds and been shot down. The EU has also said no more private sector involvement, while Roubini and others say haircuts are the only way. The idea of uber bunds and a core elite has also been refloated and redenied. Many of these proposals too are technically illegal in one way or another, even in the unlikely event that everyone agreed.

It's largely for this reason that most people see only a disorderly breakup.

It must be impossible to model such disorder. Maybe it would be very beneficial to let Greece default and return to the drachma, just as a prototype.