Baby keeps wary eye on mad Nanny

But the debt talks are 100% deficient in the talking thing

With the Greek media estimating that 50,000 Athenians are currently sleeping on the streets, three prison Governors told the Government that their institutions could no longer cope with those facing jail terms and tax charges of one form or another. Each prison is designed to hold just over 800 inmates. On average as of yesterday, they were holding 2,320 each. Astonishingly, none of them were bankers.

Everyone from Sarkozy to Juncker told the Fuhrerine that her Gauleiters EU budget commissioners were not to be mentioned again, nor indeed would the issue of Greek sovereignty. Frau Merkel said nothing very much. Nor indeed did those supposed to be engaged in talks about Greek debt….except of course for Olli Rehn, whose job is to keep saying that we are ‘just days’ away from a deal.

The truly bizarre thing about this impasse is that the Athens Government continues to act as if it was running things, whereas in reality Brussels, the ECB and Berlin have been rejecting every bondholder offer for over a week. Goldman Sachs Account Director Greek Prime Minister Lucas Papademos said debt-swap talks ‘have made progress’, but remained predictably vague as to whether the progress was good or bad.

“The fact we’re still at the beginning of 2012 talking about Greece is a sign this problem hasn’t been dealt with,” reasoned U.K. Chancellor of the Exchequer George Osborne, his  antennae sensitively tuned to the situation as always. He was just marginally out when he used the verb ‘talking’.

Whether Merkel has been temporarily knocked back is irrelevant: the fact that she and the other mad person Schauble (probably with van Rompuy’s assent) wanted to press ahead with Sovereignty transfer in the first place is the key point here. Portugal is getting closer to the edge, and Italy’s bond yields are up over 6% again. Berlin will put the sovereign takeover thing back on the table again – and the more desperate that EU2012 (the new 25) GmBh get, the more the Fuhrerine will push. For Geli always gets what she wants.

What we need right now is some form of Frankfurt Stauffenberg to emerge and start reading the riot act. Out of one side of its mouth, Berlin refuses to be the Sovereign saviour; but out of the other, it demands control. Both would be disastrous – geopolitically and financially – for Germany.

We are rapidly approaching a critical point.