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I was in Athens on business around 2007. The above-mentioned descriptions of a rundown and ragged city are inconsistent with my own observations. I found a modern, prosperous town - perhaps not quite by Northern European standards, but quite superior to what's common say throughout Eastern Europe. In fact what struck me as most unusual was an uncanny feeling that that prosperity was artificially sustained, evanescent and unstable. Perhaps if Athens were less prosperous and less tidy, well, that would have been indicative of a society living within its means, instead of on borrowed resources.
There are many reasons for economies to decline sharply and for revenues to fall into perilous discord from public spending. Where Greece is unusual amongst the other peripheral countries of Europe is, I think, a matter of culture - as has been already mentioned. There can be rampant real-estate speculations or misallocation of capital, trade imbalances, commodity-price collapses and whatnot. It happens. But what happened in Greece was, to put it mildly, self-inflicted... and not by a rapacious elite or swashbuckling bankers, but across the social fabric.
As for the impact on stocks, who knows? Impending Greek default/exit/collapse has driven European markets, if not world markets, for 4 years. How much longer can the markets cry wolf?
It worked for Germany, why not for Greece? BTW thank you for allowing Germany to default in 1948 when you guys wrote off the pre-war debts to Germany. It worked wonders for my country. Please don't make this depending on culture or race. It would be kind of ironic to let Germany default right after the Nazi regime but deny the same to "lazy southern" cultures.
let them default? how do you stop someone from defaulting?
I did quite a lot of work in Greece in the 1990s when I was based in Switzerland. My client was a very well known Greek shipping company. The guys running the company trusted their own people so much that they wouldn't let any Greek look at the books or touch the accounting. They were willing to pay Swiss rates and have us fly down from Geneva to do the audit. Their local staff were so incompetent that we spent much of our time fixing their mistakes. The only good people they had were American educated.
And this was one of their best companies; one with an international reputation. So if this was their best, no wonder their economy has gone down the tubes because they were pretty poor by our standards.
After they see what happens to Greece, I doubt Portugal or Spain or any other country will want to also exit.
What do you see happening to Greece?
If they leave the Euro would they still owe any money to anyone? I'd say no.
I'm guessing that when they leave, all of a sudden their credit ( in Drachma ) will be about the best on the planet, they can abandon their austerity measures and everything will be rosy for a while. They'll still be a second or third-rate economy, but all the people who caused them to go in the toilet will once again be able to borrow for a while.
I would guess that Portugal and Spain are sure to follow and Italy would also be a good candidate. The Euro will be a Northern European currency.
One thing that really concerns me is that the forward-looking money trends are again very weak in Greece, pointing to a new recession whereas they are solid in the other EU countries. It looks as if the European economy picks up steam over the next 6 months or so. It is imperative that a solution be found for Greece, one way or another.
If they leave the Euro would they still owe any money to anyone? I'd say no.
I'm guessing that when they leave, all of a sudden their credit ( in Drachma ) will be about the best on the planet, they can abandon their austerity measures and everything will be rosy for a while. They'll still be a second or third-rate economy, but all the people who caused them to go in the toilet will once again be able to borrow for a while.
I would guess that Portugal and Spain are sure to follow and Italy would also be a good candidate. The Euro will be a Northern European currency.
Huh?
Their credit (or lack of) will follow them back to the Drachma.
Greece is boned either way, with nobody to blame but themselves. The Euro, imo, would be better off without Greece, who have shown themselves to be nothing but childish when it comes to undoing the mess that they caused by being the most corrupt democratic western nation on the planet, down to granny in the rocking chair.
Their credit (or lack of) will follow them back to the Drachma.
Once they completely default on their Euro-denominated debt, they will owe nothing and will once again have the power to borrow.
Don't for a minute think that I've got sympathy for a corrupt culture or would consider ( for a minute ) ever investing in Greek Drachma bonds ( Dronds? )
I'm just making an assumption that there will be a rush of money made available to them for short-term notes for some 3-5 years.
I read (past, present) the news on Greece because it's a lot like an episode of "Breaking Bad": never knew what might happen, most of it was cliff-hanger week over week. Yeah, like watching a stock car race, too: we're out looking for blood, let's face it, amidst the twisted wreckage.
So I followed the news for my junky news "fix" daily when they went through round one of the blue-sky "bailouts" in 2012. Greece came close to defaulting then, very close indeed, and that with one of the then-major centrist parties in-charge. My portfolio was recovering from the 2009 tank, I was wondering if I should go to all-cash or short the Euro, but held off, thus I definitely had a vested interest in that outcome. And in the end, they kicked the can by reaching a pseudo-agreement that only postponed the inevitable.
I've read 20, 50, or a hundred short to medium length analyses of the current "crisis." Yep, it's on my news feed, more car crash rubbernecking. This time, I'm not super-worried about my portfolio. Let's just briefly review some realities: one, Greece should never have never been let into the Euro. It appears to me some pollyanna thinking by the organizers of that project glossed over some obvious problems, way back when. For that, they are culpable. Two, the entire Greek society, for various reasons, is about fleecing the tax man and somehow screwing the government. They say the thinking goes back to the Ottoman Empire days of oppression and hopelessness.
The whole country is about doing less-than-nothing and crying poverty when they go broke. And they're great at game theory, as the Marxist chief financier of Greece (who was recently sidelined) could tell you. Barstard with a pussycat grin on his face and open shirt half the time, thinking he's smarter than everyone else. Though I must admit, thus far his (and the leadership's) brinkmanship has certainly been correct they can stare down the rest of Europe and reach some sort of faux "compromise" which is code for handing out more money to bums. I guess I'm the only manager in town who knows when a "project" has reached a point of pouring in good money after bad, and walking away saying "lesson learned". It's not up to me, though.
Third, the dunces in Brussels are *letting the Greeks get away with it*, the double talk, miserable accounting, passive-aggressive lying, etc. They should have ejected them years ago, but are too afraid to do so now. And the Greeks know it. Bums in Greece, dunces in Brussels. Give me a break. Those Greek negotiators are dumb like foxes, though, to be clear. Following an insane neo-Marxist ideology or not, which btw is what they were elected to do: "Give us back our entitlements" the public says. As long as someone else is paying, apparently.
Same sort of bums are in the U.S. Not sure why people are so concerned about calling out/facing down bums, holding them accountable, both here and there. "Social unrest" and "we have no food, fuel, or medicine" are the bogeymen the bums call out every time they're held to account, though. My response to that sort of thinking is unprintable.
Here's to hoping the Greeks are ejected, or eject themselves, from the Euro. They'll then need to reintroduce the drachma, and spend a couple years reaping what they've sown with Socialist social policies. Hope it's splashed on the news every night, too, with "refugees" and others loudly complaining all the way down the line. Might be a good object lesson for other dunces around the world.
When there's blood in the streets, buy land, as my dad used to say: will make a marvelous vacation destination when they've gone to a near-worthless currency, too. Can't wait, my dollar already stretches pretty far given the week Euro. The new drachma? Toilet paper. LOL!
Greece has been pulling this crap for a few YEARS now.
Other countries got their IMF loans, instituted reforms and are all done and finished.
But not Greece.
I say let the country go bankrupt already and make the historical move of kicking them out of the EU.
Enough already.
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Throw Da Bums Out, As They Say. But Which Group?
