One of the enduring mysteries of antiquity is the make up of Greek Fire.
According to records, the Greeks would use this nasty Napalm-like substance to set fire to enemy navies. For the unfortunate victims, no normal fire-fighting techniques could extinguish it. Once a ship caught fire, it burned until there was no more fuel left.
Sound familiar?
In this morning's Financial Times, the paper reports that a few Northern European governments are toying with the idea of an actual Greek default since their officials believe that there are firewalls in place to halt the spread of contagion.
What firewalls? Since the creation of the euro zone, the raison d'être has been to eliminate the barriers between local member markets.
Do they think that the various national or EU regulators can establish the appropriate safeguards before Greece defaults?
The European financial minister and the rest cannot be treated as a control experiment on how to handle sovereign defaults in the EU.
If the fall of Lehman Brothers taught us anything, there are no events in the global credit markets that can be localized.
The first victims will be the Belgian and French banks that are heavily exposed to Greek debt followed by anyone else who issued insurance against a Greek default.
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