There is at least a chance that we will look back on the next 3 months as the time the world stopped!!!

The country of Greece has a sovereign debt of about $500bn, which is just a bit less than that of Lehman Bank when its bankruptcy plunged the world into a banking crisis that was only averted by the wholesale transfer of bank debt into sovereign debt.

The UK banking system currently has outstanding loans of £6.5tr (yes that is trillions) which is 4 times the size of our GDP. And the banks themselves hold a mere £300bn of equity capital to support those loans. Nobody really has a handle on where those loans are placed and how much any individual bank is exposed in the event of a Greek default.

But what is certain is that when the default happens, if it is not managed far better than past experience gives us cause to hope for, it will lead to another crisis of the banking system as they all refuse to lend to each other as happened in 2008. And this time round the countries will not have the funds to bail out the banks.

There is no doubt that the Greek people have been culpable in that the they have been living far beyond their means for years, and they have been doing it on borrowed money.  But the punishment that is being asked of them is that they pay €100bn of debt repayments (reparations) pa.  This represents 40% of GDP and is plain impossible. This is why a default is considered inevitable.

The weather is not the only thing that is looking stormy this father’s day weekend.