Greek tragedy!

[wattie]

As an investor You  may have your head buried in the sand.......but even then, you're probably aware of this.The sovereign debt situation is not  good.

A Greek default is seriously bad news for us all and Regardless of what happens re future bailout funding etc, Greece has NO credibility at all.

You'd have  to be mentally deranged to lend Greece money, now....and in the future...on the hope and mutual understanding they'll pay it back....they won't.....they can't afford to.

That's why......whatever happens, it'is just a short term solution....it doesn't solve the problem. Greece is bankrupt....so is Ireland...so is Portugal.....and others . Anyone play dominos?

The financial crisis isn't over by a long shot....it's moved from banks to countries!

Cheers Wattie

[benyeats]

and all reported on the news here with nary a mention of the parallels between our country and their's (massive government spending that no one wants to pay for yet are prepared to strike / riot when the government try to reign things in a bit.......)

[Andrew300]

P.I.G.S. But why did China lend the Spannish money!,to keep the euro going,that's a multi million ( dollar ) question

[wattie]

That's simple, china has to be seen to maintain the status quo,..it has  to date  had an interest in ensuring the world economy is seen to be stable.
In simple terms each  and every country issue bonds to raise money to pay for it's national expenditure.  Normally a Sovereign loan is assessed as Rock solid, guaranteed repayable, AAA rated (ie extremely low risk of default as a country puts it's name behind the repayment).
China, other governments  and private investors have to date  bought  bonds to show support and as an investment in the countries that issue them.Trouble is we've reached a point where the  Sovereign credibility of a country  (currently the highest level of trust worthiness, reliability, credibility, and all other words meaning the same!)  ......namely Greece, is  potentially worthless!
To put this in real basics....if Greece defaults, it's a game changer. It means that a country potentially will take your money and not give you it back......this is frankly disastrous!  It's basically the unravelling of trust in the GLOBAL financial system and life as we know it.
Trouble is, Greece is the tip of the iceberg. Ireland is bust, Portugal too....Spain not far behind.......USA massively in debt.....
belts, shoe laces and razors please!
Cheers Wattie



Investors will not buy sovereign bonds Who can you trust, if you cannot trust a country? It basi

[benyeats]

[quote="wattie"]
That's simple, china has to be seen to maintain the status quo,..it has  to date  had an interest in ensuring the world economy is seen to be stable.
In simple terms each  and every country issue bonds to raise money to pay for it's national expenditure.  Normally a Sovereign loan is assessed as Rock solid, guaranteed repayable, AAA rated (ie extremely low risk of default as a country puts it's name behind the repayment).
China, other governments  and private investors have to date  bought  bonds to show support and as an investment in the countries that issue them.Trouble is we've reached a point where the  Sovereign credibility of a country  (currently the highest level of trust worthiness, reliability, credibility, and all other words meaning the same!)  ......namely Greece, is  potentially worthless!
To put this in real basics....if Greece defaults, it's a game changer. It means that a country potentially will take your money and not give you it back......this is frankly disastrous!  It's basically the unravelling of trust in the GLOBAL financial system and life as we know it.
Trouble is, Greece is the tip of the iceberg. Ireland is bust, Portugal too....Spain not far behind.......USA massively in debt.....
belts, shoe laces and razors please!
Cheers Wattie



Investors will not buy sovereign bonds Who can you trust, if you cannot trust a country? It basi
[/quote]

Did the Argentinian default in the 1990s lead to unravelling of the global financial system ?

[Trigger]

Well, it depends whether you are saying Greece has no money or the Greeks. I deal everyday with unbelievably wealthy Greek Shipowners who continue to do very well....yet clearly pay no tax to their home country......

T

[Monza]

one of the main problem in greece is the incredible parallel economy which is very very developped with no tax/incom for the country and even in the normal economy, individual people or companies don't pay their tax since years !! this system must stop, they'll have to pay and it's one of the reason people are manifesting in the streets !
They had been gouverned by stupid people to since years ... but who elected them ?

[wattie]

Trouble is fellers  that Greece is running out of time....and the Europeans have no solution to the situation.....and the contagion effect on the cost of other countries in a similar situation trying to borrow is rising.

Argentina didn't cause a collapse, but the worlds financial system was arguably stronger then than it is now......debt everywhere both private and sovereign.

Even America risks default if it doesn't raise it's National debt level by 2nd August..... And it's already over $500,000 per household!!!!

Cheers Wattie

[Monza]

yes, "nous marchons sur la tete" as we say here.

[Andrew300]

[quote="wattie"]
That's simple, china has to be seen to maintain the status quo,..it has  to date  had an interest in ensuring the world economy is seen to be stable.
In simple terms each  and every country issue bonds to raise money to pay for it's national expenditure.  Normally a Sovereign loan is assessed as Rock solid, guaranteed repayable, AAA rated (ie extremely low risk of default as a country puts it's name behind the repayment).
China, other governments  and private investors have to date  bought  bonds to show support and as an investment in the countries that issue them.Trouble is we've reached a point where the  Sovereign credibility of a country  (currently the highest level of trust worthiness, reliability, credibility, and all other words meaning the same!)  ......namely Greece, is  potentially worthless!
To put this in real basics....if Greece defaults, it's a game changer. It means that a country potentially will take your money and not give you it back......this is frankly disastrous!  It's basically the unravelling of trust in the GLOBAL financial system and life as we know it.
Trouble is, Greece is the tip of the iceberg. Ireland is bust, Portugal too....Spain not far behind.......USA massively in debt.....
belts, shoe laces and razors please!
Cheers Wattie
Here's a pot guess.the chinese have put the money  up for the pound,euro,and dollar the most traded is dollar v euro v pound I think,if usa goes bust , or euro,will it be yen v euro ,or will it yen v dollar only, maybe a new world leader 


Investors will not buy sovereign bonds Who can you trust, if you cannot trust a country? It basi
[/quote]

[Andrew300]

Being a newbe I messed  that up

[wattie]

We've all done that...you can modify a post if you messed it up a bit.
No stress, cheers Wattie

[wattie]

Dollar cannot go bust....if that happens it's back to bow and arrows and we all fight each other! Trouble is, America needs to turn the debt ship around....or everyone in the USA is basically fecked! Rest of the world is trying to put it's public finances in order.
Don't think anyone in the US government really  understands this tho......head in the sand (middle eastern sand usually - trying to police the world).

If you haven't seen this movie..."inside job" it's a must!
http://www.sonyclassics.com/insidejob/

Ex presidents, Politicians (worldwide) senior bankers, negligent credit ratings agencies, Obamas advisors.....rotten to the core....and I suspect that none of them fully understand the monster they've created cause they're too busy trying to plaster over the cracks!

Cheers Wattie

[Steve050567]

Not forgetting the US obsession with free market and lack of government intervention.

So far we've had worldcom, enron, lehmans, bear stearns etc. these companies have ripped off it's workers, it's pensioners, the government and us, no-one wants government to stiffle business, but neither can businesses go unhecked.

[wattie]

So the Greek government survived a vote of confidence by Greek politicians.......narrowly!

Not exactly reassuring for the rest of the world

It ain't over by a long shot!

Cheers Wattie