Remember the much celebrated Greek Debt Exchange?

Apparently is less popular in the implementation phase (Greece Bondholder Exchange Not Working).  

This plan was supposed to emulate the Uruguayan debt exchange of 2002.  Unfortunately, nobody bothered to study either this plan or the Uruguayan exchange.  Uruguay, a VERY small country, had a LIQUIDITY problem because their debt was concentrated on short maturities at a time when their neighbor, Argentina (a much bigger economy) had a SOLVENCY problem. 

The Greek exchange is more akin to the last efforts by (Argentine minister) Cavallo right before the default (for more information check our "Back To The Future" link on the main page.  By the way, at that time Argentina had deficit of well under 3% (they were attempting to take it to zero) and a debt to GDP of 55% (Greece's last know calculation was over 120%).

One thing is clear, everything we have been told by the IMF and the European policymakers up to this point has be wrong, misleading or both.