Debt, Debt as Far as the Eye Can See

New York Times on Greece -

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

In Dubai -

The cost of insuring Dubai's sovereign debt against default rose to its highest level since November as concerns resurfaced over the emirate's large debt.

According to CMA DataVision, Dubai's five-year credit-default-swap spread—a measure of credit risk—rose close to 0.5 percentage point to trade up at 6.32 percentage points in late trading Friday. These elevated levels indicated that Dubai is considered one of the riskiest sovereigns in the world behind only Argentina, Venezuela, Ukraine and Pakistan.

From the Washington Independent -

Amid fears that Switzerland might come to an agreement with the United States on banking privacy and tax evasion disclosures, Credit Suisse issued a report identifying those countries it determined to have the highest risks of default on their sovereign debts. Number 16 on the list was the United States, based primarily on its 2009 budget deficits and government debt.

Countries ranked less likely to default include corruptocracy Kazakhstan, less-than-reform-minded Indonesia, the debt-ridden Philippines and violence-ridden Colombia. By comparison, U.S. Treasuries prices are up today despite a new issuance this week.

In the States -

States are looking to the federal government for more help balancing their budgets, but the Senate is not heeding their call.

Federal aid to the states was among the top priorities in an early Senate job creation bill, as well as in a $154 billion measure passed by the House in December. But it has fallen off the list as Senate Democrats look to craft legislation that will attract bipartisan support.

The Real Effect
The debt deleveraging has just begun and has a long way to go before it's run its course. Look for continued crisis as sovereign defaults become a more and more plausible scenario. This, of course, will give way to calls for a Shiny New Global Tax/Currency/Bank System which will be purported to solve all humanities woes. But first, we crash...