Larry Lindsay's Succinct View of the Euro Debt Crisis

I caught some of Larry Lindsay's appearance on CNBC this morning from 7-8AM. While working while listening to the chatter in background, I didn't really hear anything of note until his closing comments.

On the subject of the European debt crisis, Lindsay remarked, to paraphrase,

'The ECB only has about 11B euros. The various national central banks in the EU have about 70B Euros. That's it. So that is why they all look to the EFSF to provide Euros to resolve the crisis.

It's sort of a circularity.'

Not quite the gritty detail of Kyle Bass' game theory and originally-commissioned research on the attitudes of German citizens towards bailing out Greece, Spain, Italy and whoever else winds up insolvent. But Lindsay implies the same end.

That is, insufficient existing funds to simply pay off existing sovereign loans at face value. Thus necessitating defaults, probable bank insolvencies, bankruptcies, and then a re-start of European finance after all concerned have experienced the actual losses from holding either affected sovereign debt, bank equities, or bank liabilities.

Sometimes it's helpful to hear several different approaches to the analysis of an important developing phenomenon. This seems to be one of those times.