This page has been archived and commenting is disabled.
Assessing The Risk Of A Greek Default
Tomorrow, Friday, April 24th, the finance ministers of Europe will again meet to discuss the fate of Greece’s bailout program. Although no definitive course of action is expected to come out of this meeting, it is yet another chance to assess the potential consequences if indeed the Greek government defaults on its loans.
Greek debt currently sits at 175% of GDP, and there has been a recent flight from Greek bonds. Short-term (3 year) bond yields are at nearly 29%, and standard 10-year bond yields are over 12.5%. Bond analysts are giving Greece a 90% of defaulting on its debt over the next five years, which is up from just 67% on March 1st.
What happens if Greece defaults? Many expect that it would lead to an exit from the monetary union and that the country would have to return to their previous currency, the drachma.
In such a case, there would be substantial chaos as other European countries own €52.9B of bilateral debt, the European Financial Stability Fund (EFSF) is owed €141.8B in emergency loans, the ECB holds €27B of tradeable bonds, and €67.5B of bonds are held by private investors. It is likely a banking crisis would result, as the web of debt unravels between banks and countries throughout the globe.
Even if Greece doesn’t exit the Eurozone, it will be between a rock and a hard place. With an anti-austerity government in place, the inability to print its own currency, and skyrocketing yields on bonds and confidence, it will be difficult to find a way forward.
Courtesy of: Visual Capitalist
* * *
And finally, for a good overview of how this all started, don’t forget to view this video on the Eurozone Debt Crisis visualized.
»
- 27365 reads
- Printer-friendly version
- Send to friend
- advertisements -
For fucks sake just get this over with.
Beat me to the punch Budnacho. Exactly what I wanted to post. Just go get the brick and end it for fucks sakes.
Like watching my degenerate uncle look under his sofa trying to find enough change to run to the 7-11 to buy the $1 scratch off lottery ticket that he knows will change his life.
Ohh yea and he never finds enough change so he promptly beggs the rest of the family for it and if we don't give it to him, threatens us by leaving a flaming bag of shit on our front step. Sound familiar Germany?
So you'll give me a dollar if I threaten to leaving a flaming bag of shit on your doorstep, or is this a "family only" kind of thing?
Now that the honeymoon period has passed Syriza is stuck in a rut, they don't have the energy, the talent or the bandwidth to do anything meaningful.
If I was leading Greece I would do the following...
Step 1). Greece should announce that they fully intend to follow a very strick austerity program, announce that they will privatise virtually all aspects of the state apparatus, sell islands and land. Greece should announce a plans to nationalise private residencies (to be privatised later), increase taxes further, and dismiss their military... All so that the debt can be repaid as fast as possible.
Step 2). Buy up all of the CDS on Greek debt, use agents, proxies, whatever it takes, buy up the entire Greek bond CDS market to the point where investment banks start issuing fresh paper.
Step 3). Renege on all the austerity promises and default.
Step 4). Collect the CDS payout and live happily ever after like Kings.
Throw those pathetic Greeks out of Europe already. It´s just a worthless third world country.
It´s just a worthless third world country.
Where western civilization basically started is all . . . .
The Greeks have nothing to do with "western civilization" at all.
just wow !
Hows that for standing on one's head!
Yogi, get your blood to circulate. Ya need it!
That is the absolute funniest shit I have read in a long time, I laughed so hard that coffee came out my nose and now my nose is fucked up and I can't stop laughing...nice start to the weekend, thanks.
Greece is an insignificant worthless shithole!
This is actually relatively fast compared to Japan.
OPA!!!
Ok due to identified risks Greece will never be allowed to default, ever.
Damn it. You got me again with your avatar!
That avatar got me too! Saw an advertising here the other day doing that shit too.
Didn't you ask youself "Why is the bug on my screen crawling around inside a box that's not actually a box but pixels lit up to look like a box". That'd be a bug placing way too many constraints on itself.
Just put some Windex on it
I propose .... Athens and Ferguson .... as sister cities !
What did Ferguson ever do to deserve that?
Do the cops yell "Opa!" when they shoot someone?.
Do the cops yell "Opa!" when they shoot someone?.
First they light the perp's head on fire . . . .
Brussels is banking on Syriza fucking up, and having to call for new elections, at which point they will go full out blitz to buy/rob/cajole/manipulate and put a technocrat in place. They will then kick the can down the road endlessly and make slaves of the dumbass Greek people.
It's the same ol' schtick, every time. Rinse and repeat.
Unless Syriza pulls its head out of its ass and actually does something, the clock is starting to work against them.
Reintroducing the Drachma is the only thing they can do. Doing it is not going to be pretty for Greece and they never sought the mandate for it from the people. They will have to conduct a plebiscite authorising the government to exit the euro. If Syriza fails to win the plebiscite, they should quit and call for fresh elections and not participate in the elections.
There is a very unconventional choice available to Syriza, but I doubt they will take it. They can introduce Drachma as a cryptocurrency and recognise it as legal tender alongside the Euro, meaning the crypto-Drachma can be used to pay taxes. Since it can be used to pay taxes it gets instant value. The entire banking system is bypassed in issuing (which only the government can do) and transferring the currency between any two parties including the government. I don't think it violates any agreements that Greece signed to become part of the eurozone, but if it does, it will be upto the rest of the eurozone to throw Greece out rather than Greece voluntarily exiting the euro.
ah, the old "put a technocrat in place" thing
as a reminder, there are a lot of europeans that love to have technocrats "in place". in fact, that's one of the biggest political differences between most of Europe and the US
while in the US people love to have "one they could have a beer with" elected in executive positions, europeans generally prefer them to vote them in Parliament, and then have them to appoint an "expert" or not
and this is what "technocracy" means: "government of experts", supposed, btw, to be apolitical. the very moment a technocrat becomes political, for example as the former Italian Prime Minister Monti founded his own party, he stops deserving the label "technocrat"
but any expert, technocrat or whatever kind of minister or prime minister still needs an elected Parliament to appoint him or her
PM Monti was an excellent example for that. the Italian President Napolitano made him a Senator For Life per presidential decree, as the Italian Constitution specifically allows
as Senator, he could, under Presidential appointment, try to find a majority in the Italian Parliament. which he did, and so he his government (US read: administration) was appointed
if you don't understand the Parliamentary System you won't understand European politics, period
Ghordius,
I enjoyed this presentation as this brings us back to the key question in our ongoing debate :
Either Europe goes federal and we have an economic UNION or we should not have monetary Union. Simple as that!
This has been my position, and which BTW Europe missed in 2000 Nice conference, when Schroeder/Fischer came hat in hand to Chirac/Jospin to align their economies on a common platform of productivity and fiscality and France said : Sorry but Nein, we work 35h/wk and we are only interested in agricultural handouts from EU (PAC).... And that shot down the fiscal union then and Schroeder did it all on his own!
And the whole world has seen since then that the German Schroeder model is the best one as it is fiscally prudent ! As the common currency especially with the increase of EZ partners, beginning in 2001 with Greece had the potential of creating SYSTEMIC havoc in Euro system. The Maastricht rules were abandoned in 2004 by everyone as the gravy train of American WS created a rush to debt spending which went "boom" in 2008 !
You have always argued that the current confederate route is the best...and the Euro can resist.
Now we have the acid test !
... there are a lot of europeans that love to have technocrats "in place". in fact, that's one of the biggest political differences between most of Europe and the US
Yeah, and that's why Europe is so much more fucked up as a place to make a living than US. Technocrat became a synonym for unaccountable... Just like the good old days of the medieval times: there are lords (who know better of everything) and then there are serfs (who don't matter except as a revenue source). EU bureaucracy looks something very similar to the Catholic church before Luther... saying that a technocrat needs parlamentary approval is like saying that a bishop needs landowner's approval to act within his congregation...
What happens? In three months Greece will be under martial law. In six Greeks will be dropping dead from hunger, with everything worth eating exported. Every Greek employee at every firm bigger than a corner cafe ti be shitcanned and replaced by guest workers from Africa, India and the Middle East who will work for a pittance. Of course, no working-age Greek will be allowed leave Greece alive without having wealthy relatives wire €100,000 to the military government for an exit visa.
My word, what fun our betters will have with Greece! The best social engineering lab they've had to play with since the days of the Soviet Union!
Greece wont default. You heard it here folks.
All you idiots that get your investment decisions from ZH...gold to da moon!!!! bitchez!!!! keep stacking!!!!...and banzai draws his ridiculous cartoons and everyone jacks off on how evertthing will crash..ANY SECOND NOW.....deserve what youre getting.
Yes and no... Greek is broke and the natural thing to do then is default. On the other hand, a default is not allowed for obvious reasons... so you may well be right, they will AGAIN paper Greece over until the debt problem will have to be solved on a much larger scale. There is already too much outstanding debt that will never be repaid, at least not in currency that has as much purchase strength as today. Vis-a-vis paper money (debt), physical gold eventually will go to da moon though. When that is, how it is triggered is anyone's guess. As long as 99% of all "gold" traded is paper gold, this is not going to happen though. The BRICS are gobbling up more gold than all the output of all mines in the world, and the current price is near or below the cost of production (even with the low oil price). Eventually there will be shortages of the physical metal. There is some evidence that the physical market is already tight... The paper price will ultimately reflect this, but obviously we're not there, YET. It used to be normal to have some 5 to 10 % of once's portfolio in gold... and for good reason... The future is bright for gold IMO, but it's always coldest and darkest before the dawn.
. . . . and banzai draws his ridiculous cartoons and everyone jacks off on how evertthing will crash..ANY SECOND NOW.....deserve what youre getting.
Yes, and you can file this post in the "Asshole" outbox . . . .
Why doesn't someone just lend them the 313 billion to pay all their debt off? Consolidate it all into one manageable debt. That's what I did back in 2001 when I owed a whopping 2k.
Come on Greece, it's not rocket surgery.
There very ECB could lend them 300bn at 0.01% interest and no one loses a dime.
Someone just wants the crash to happen.
Were is Goldman-Sachs?
They were in the kithen cooking the books with swaps to get the Greeks into the EU!
Now Greeks ran up all their EURO credit cards, their credit line is gone.
They pissed the m8ney away and, of course, are crying because you can't buy a BMW with Drachma!
Maybe they need to legalize weed, hookers an gambling to sqeeze more money out of the Germans?
The game is over.
Goldman wins again. You know they have cds provided by AIG to make next year s bonuses.
None. No way France and Germany will be left as the bag man.
Just looking at the flowchart indicates that in no way shape or form should a person be able to make generational changes or influence upon a person/persons who have not even been fucking born yet, looking at both of those old ball trippers Buffett and Soros should leave no doubt in the minds of the uncompromised..
Thread jack/ aud/jpy is going to "break~out" of its range.
There is a great documentary on RT about the raping and pillaging that the Troika foisted on the Greeks. Go to:
http://rt.com/shows/documentary/250217-troika-imf-ecb-eu/
Greece is a small worthless shithole!
EU is a big worthless shithole
USSR is a big worthless shithole
USandA is the biggest worthless shithole
now say something new