Greece default

blinko

Greece default how and when do you guys think this will happen.

I think personally its going to be a orderly default eg a selection of banks and governments will take the hit to avoid the Euro going totally tits up.

But its not going to be pretty when it hits the markets 11

Bloomberg

blinko wrote: »

Greece default how and when do you guys think this will happen.

I think personally its going to be a orderly default eg a selection of banks and governments will take the hit to avoid the Euro going totally tits up.

But its not going to be pretty when it hits the markets 11

What an interesting thread, I think that if Greece lasts for another two years without defaulting then they will be lucky. Many UK banks have a high exposure to Greece and the fallout from a default will be far reaching and devastating. I personally have sold many of my shares in anticipation of a Greek default.


As many of the Euro zone countries are downgraded we will be looking at sky high interest rates at some point. Whether we like it or not Europe has a north south divide, at the top end we have the Germans who are the power house of Europe and at the other end likes of Greece.


Banks and governments will take a hit as they try to save the doomed Euro. Greece has brought it's problems on itself and we will all suffer as a result. As reckless as some of our previous governments have been we should thank our luck stars that we stayed out of the Euro.


Once Greece defaults we will see a succession of other countries dropping the Euro and going back to their own currencies. A united Europe with it's own strong currency is a pipe dream. Europe is slowly falling apart.

atush

UK banks have far less exposure to Greece than German banks do. Uk banks have great exposure in Ireland.

Bloomberg

atush wrote: »

UK banks have far less exposure to Greece than German banks do. Uk banks have great exposure in Ireland.

Nevertheless the UK banks would take a hit in the event of a default

atush

Of course they will. It will hit the whole EU.

But Uk banks will take a MUCH bigger hit if Ireland, Portugal or Spain go down. Not to mention Italy. We are less exposed to Greece than many other eurozone countries.

Bloomberg

atush wrote: »

Of course they will. It will hit the whole EU.

But Uk banks will take a MUCH bigger hit if Ireland, Portugal or Spain go down. Not to mention Italy. We are less exposed to Greece than many other eurozone countries.

Agreed - Greece defaulting is by far the lesser of two evils.

StevieJ

atush wrote: »

UK banks have far less exposure to Greece than German banks do. Uk banks have great exposure in Ireland.

What about contagion?

Reaper

Financialy Greece is a drop in the ocean. It doesn't really matter whether they default or not. What does matter is if other bigger countries get into trouble they will expect the same treatment, particularly if it involves writing off debts.

The leaders seem to be dodging the issue. Throwing more money at it will not solve the problem. There are only 2 solutions:

1) Issue "Euro Bond" debts that are backed by the whole of the EU, not just individual countries. That solves the problem of people being unwilling to lend any more to countries that are percieved to be at risk of default.
2) Countries to start leaving the Euro. I can't see how a weak country can possibly leave, there are switch over practicalities that make it impossible. However if Germany and France were to leave that would work and allow the over priced Euro to sink and take the pressure off the struggling economies.

One or both the above are needed, but Europe has its head in the sand and is hoping the problem will go away. It won't.

IronWolf

Everyones expecting it now and banks have had plenty of time to sort out their exposure, I can't see there being that much of a catastrophe

Ark_Welder

A Greek default is assumed in many quarters, so some of will already be factored into prices. It is the uncertainty of the 'when and how' that causes volatility (allowing larger, geared traders to profit). Once the uncertainty is removed it may actually lead to a rise in prices, but that is probably dependent upon the 'how', and what processes are put in place - and announced - to support the banks and economies that will be the next in the firing line. The currently ideal 'when' is thought to be once Greek revenues are sufficient to cover expenditure, excluding debts. Once the government can pay its employees, benefits etc, then a restructure of its debts should be easier.

Remember also that 'default' does not necessarily mean 'get nothing back', it may mean 'get back (a lot) less that you were expecting'.


Of far more immediate concern is the USA. They may either do something very, very, stupid in the next two weeks, or nothing sensible until after to 2012 elections. Greece is the sideshow to Europe, as Europe is to the USA.

rockitup

Ark_Welder wrote: »

Of far more immediate concern is the USA. They may either do something very, very, stupid in the next two weeks, or nothing sensible until after to 2012 elections. Greece is the sideshow to Europe, as Europe is to the USA.

Geithner was on CNBC a short while ago saying "Europe needs to act more forcefully on debt crisis"

Lalalala America must be doing fine & dandy then lalalala :rotfl: