Greece
#31
09-20-2011, 08:34 PM
I think Ireland is in the best shape of any of them thus far but yes, once one goes they all start going. Ireland has been really hammering with tourism ads in the US and UK whereas the others have not been doing that as hard as the Irish have.
It's going to darn near take a miracle at this point for Greece and Italy is on the verge of needing a miracle, maybe they can get the Pope to perform one as part of his sainthood. 
#32
09-21-2011, 03:46 AM
For anyone that hasn't been following this. Forced austerity has cut Greek expenditures but every person laid off means one less taxpayer and every dollar in benefits cut means one less dollar being "money multiplied". The net effect is a severe recession with negative gdp growth and higher expenses. To get the next bailout money Greece is being forced to fire 100,000+ government employees.
Default would hurt but at least then the Greeks would have the power to devalue their currency. As for Italy, Portugal, Spain and Ireland. They'll be watching what happens with Greece to see what their best move is. Meanwhile, money is flowing out of Euro banks and German politics is a mess (lol complete with a political party called the "Pirate Party" - I'm not joking). The Greeks no longer have their own currency since they joined the EU. The use the eurodollar and cannot devalue it themselves. However, if they do default it might have an impact on the eurodollar.
#33
09-21-2011, 09:23 AM
After 2 days of conference calls between Greece and the people representing their creditors there was no major announcement which of course means that no agreement was reached. Greece could run out of money in Oct but I think that just means Gov employees wouldn't get paid (is that default???). The next debt payment they have to make isn't until Dec and if they fail to make that, it's default by anyone's definition. That gives 2 months between apparent default and real default to work things out. Or the Greeks could simply announce default sooner (I think). That bond I was posting pics of early in the thread - the 2 year Greek bond. It got up to 75% last week when it looked like default was about to happen. It dropped back down to under 55% by last Friday. Now it's over 65% and climbing. For people that know even less about bonds than I do (and someone please correct me if I'm wrong!), a 75% return on a two year Greek bond means you buy a $100 bond for $40. Two years from now Greece pays you $100 for it which gives you around $30/yr interest - about 75%/yr. For comparison, the 2 year US bond pays around 2%. Edit: For an idea of how cooked Greece is - from the NY Times...
Total Greek public debt is about 370 billion euros, or $500 billion. By comparison, Argentina’s debt was $82 billion when it defaulted in 2001; when Russia defaulted, in 1998, its debt was $79 billion.
Last edited by MichiganDriver; 09-21-2011 at 10:49 AM. |
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