IMF Considering London Agreement As Greece's Template As No Vote Expected

With a weekend vote in Greece potentially triggering a derivatives default, one that banks and Larry Summers have indicated they are prepared for (“foam is on the runway,” Summers said last week), what are the variables to consider in both the long and short term?

The weekend vote comes as the IMF released a scathing report this morning, pointing out that Greece will likely need 50 billion euro bailout over three years. But the kicker is the IMF mentioned the previously unmentionable: Greece debt may need a haircut, reducing payments to investors who purchased Greek sovereign debt. Such investors made the wrong bet despite assurances they might have received promising that the periphery nations “can’t...