SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: John McCarthy1/20/2010 3:16:09 PM
   of 116555
 
Monday, January 19, 2009
Death Watch: Greece, and What Its Default Could Mean

The biggest threat to the U.S. Obama rally and the miracle recovery proposed by Democrats in the $825 billion bail out package may possibly reside about 6,000 miles away in Greece.

On Wednesday, Greece became the first "Western" European country, and EU member, to have its ratings cut by S&P in recent years (link to S&P assessment here).

Greece's debt is a staggering 98% of 2009 GDP (the U.S. with its estimated $10 trillion of debt is at about 70% of GDP).

Thomas Mayer, chief European economist at Deustche said "The downgrade of Greece is a wake-up call to everyone that there is a price to pay for taking on big levels of debt."

Wow Thomas, no kidding.

So what does a potential default by Greece mean for the European Union?

Short answer - nobody knows.

The FT tries to present some scenarios of what a bail out of Greece would look like, none of which are attractive, with the worst case summarized as "you could conceive of a scenario under which the bail-out had to be so large that it would bring down the entire system.

This could then provide the non-defaulters with an economic incentive to leave."

Could a Greece default have a domino effect of dismantling the European Union?

Time will tell.

In the meantime as S&P is going down the list of potential downgrades, here are some standouts in the debt/GDP category:

Austria: 65%;
Belgium: 85%;
Germany: 65%;
Italy 102%;
Japan 111%;
Portugal: 61% and
UK: 53%.

zerohedge.blogspot.com

Posted by Vi
Message 26259496
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News