Greek talks have more layers than the very best Phyllo dough in Athens

Markets around the world are rallying on the premise that Greece will knuckle under and concede to the Trioka demands.

The consensus believing it is best for the most people possible to have Greece accept austerity to the nth degree, so therefore it will get done, so buy.

Europe stocks are up +2% on this rational, with bunds reacting similarly.

However at &:15 am Monday morning EDT there appears to be some blooms coming off the rose as Europe moves towards market close.

Not sure how much of the gains will want to sit overnight without an announcement on the deal.

US futures have been higher than now, so there is a contrarian view working through the rally.

Readers here know that no real deal will be proffered or accepted until there is complete capitulation by the Trioka — who have much more to lose than Greeks. And we are not close to being there yet.

The Trioka has learned one thing from the US. Do not let a Lehman Bros. event happen on your watch.

They know that there are unforeseen consequences to a Greek default. IMF chief Christine Legarde knows the derivative market better that any regulator — that’s why she is where she is.

Interest rate swaps and other instruments totaling trillions of euros are the key to the talks and the Greek financial minister knows full well that Legarde can’t afford to trigger a default in those instruments.

So today’s artificial deadline will come and go. These negotiations have more layers than the very best Phyllo dough in Athens.

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