Greece...

AndyGuil

wellused wrote: »

The other PIIGS may be in a very bad place but the general opinion in the Eurozone or Germany at least is that they can manage the problem with euro bonds and austerity measures, on the other hand Greece has not only a financial problem but a political one too, in short Greece is beyond saving and the money would be better spent elsewhere. The warning to the remaining Piis must be as long as their governments are seen to be doing what Germany prescribes then they qualify for help.

Greece is small and can be helped, but it is not working. Italy is big and can not be helped. They are in grave danger at the moment and the markets will turn on them once Greece is out.

The_White_Horse

The Eurozone will not let Greece fail. Greece should reject all their demands and say "listen, you give us the money and your idiot currency can stumble on for another few months, or don't - then we all go to the wall."

Wookster

Terry Smith on Greece:

I also think that the fact is that if the man from Mars landed whilst we’re speaking and paid off 100% of the Greek debt, the country would still be unable to cope.

wellused

AndyGuil wrote: »

Greece is small and can be helped, but it is not working. Italy is big and can not be helped. They are in grave danger at the moment and the markets will turn on them once Greece is out.

But why wait until Greece is out, and how much good will it do the markets if they turn on Italy?

AndyGuil

wellused wrote: »

But why wait until Greece is out, and how much good will it do the markets if they turn on Italy?

Greece is the weakest country in the Eurozone. The market will focus on the weakest point mostly. This involves short positions, reduced credit ratings, reduced/low growth and increasing interest rates. Portugal is the next weakest and Ireland are not in a good position. Italy however can not be bailed out, they are too big. They have fallen back into recession and the interest rates they pay is already unsustainably high. This is exactly the same way Greece started its downfall. Then they were propped up with bail out money. This is not possible with Italy and so they will fail quite easily. Once the markets are finished with Greece they will move onto Italy and co. The main reason Greece is being bailed out so much is to try and keep the Eurozone together. Markets are very vicious if they discover weaknesses.

wellused

So all of this massive write down of Greek debt is good for the markets and they hope to force Italy into a similar situation?

BlondeHeadOn

wellused wrote: »

So all of this massive write down of Greek debt is good for the markets and they hope to force Italy into a similar situation?

Kinda cute, isn't it?


:huh:

AndyGuil

wellused wrote: »

So all of this massive write down of Greek debt is good for the markets and they hope to force Italy into a similar situation?

It is good for the long term. The short term, not so good. Investments tend to avoid risk and where higher risk is involved they want greater returns for this. Once Greece defaults the risk for Portugal, Ireland and Italy increases. The market will want a greater return and, countries and banks become forced to pay more interest. This is why it will affect the UK if the Eurozone fails, not only will a lot of money be lost, it will make the UK weaker and higher risk. This impacts the rate at which money is borrowed at.

wellused

So when the UK becomes weaker presumably so too does France, Germany, USA, China, the world in general. Not good for anyone including the "markets"?

AndyGuil

Markets make money on the way down. People pulling money out of the markets hurts them. People shorting the markets hurts the countries. People demanding higher returns due to higher risk hurts countries. They can make money on the way up as well as the way down. They make money through market cycles.