"The economical advantages of commerce are surpassed in importance by those of its effects, which are intellectual and moral. It is hardly possible to overrate the value, in the present low state of human improvement, of placing human beings in contact with persons dissimilar to themselves, and with modes of thought and action unlike those with which they are familiar.
"There is no nation which does not need to borrow from others, not merely particular arts or practices, but essential points of character in which its own type is inferior.
"It may be said without exaggeration that the great extent and rapid increase in international trade, in being the principal guarantee of the peace of the world, is the great permanent security for the uninterrupted progress of the ideas, the institutions, and the character of the human race."
(John Stuart Mill, Principles of Political Economy, 1848; Thanks to Columbia University Prof. of Economics and Law, Jadish Bhagwati, for directing me to the quotation.)
Two things are going to happen early Mar. 1, while most of us are sleeping. The first is that a bear trap will be sprung on the hedge funds and other speculators who have been shorting the euro and buying credit default swaps on Greek debt. Many of those who took short positions in the currency and the Greek bond market were copy-cats with no real experience of euro realities.
At 9:15 Monday morning (Athens time) the Finnish EU finance commissioner will meet with President Papandreou and close a deal providing finance in return for a further 4% cut in the Greek deficit. The money will come not from the state coffers of northern Europe, but from para-state entities like the Caisse des Dépôts et des Consignations of France and the Kreditanstalt fuer Wiederaufbau of Germany. The Dutch, who have no government (it fell last week), apparently are not participating. About half of Greek financing needs would be provided, about euros 24 bn.
The way I know this is that the BBC, Reuters, Bloomberg, and the Business Week, and Wall St. Journal websites all hint at the same outcome without citing sources. If any of you are hedge fund managers please set your alarm clock. If you own hedge fund shares, set your alarm clock and contact the managers.
*The other news is that we are going to buy Chile Fund at the opening. CH closed Friday at $18.05 but it will become more affordable because of the earthquake.