Argentina has been excluded from markets politically, not due to anything inherent in their economic crisis. That’s a big difference.
It’s a bad examples for PIGS is Greece doesn’t suffer for defaulting.
Oh and BTW, if I am not mistaken, Greece defaulted on the first IMF tranche last week AND the european facilities have Cross-Default clauses so as far as I can tell, Greece is already in outright default and fucked.
Could you elaborate, please ?
They will suffer though, markets will raise their borrowing costs, or is it that bond holders want punitive damages over and above?
Woh woh woh! banks are opening in greece tomrw ? where did you read that ? I’ve been in front of bloomberg for a while and I haven’t seen anything along those lines…
^ They are talking on Bloomberg TV right now, they say unknown. I guess Tsipras has not yet publicly changed his plan to open them tomorrow. Who knows.
Interesting, for all the negativity around the “no” vote, the ETF in NY is quite buoyant. It’s up 10% from last week’s low, even though the outcome of the vote was negative.
^ I see - can’t comment on ETF market but in options space, vols earlier today were at levels not seen in a while. Massive volumes going through in the first minute, i was long over the weekend - paid a lot of theta, but since we gapped down I was happy. Then some idiot came in the first 60 seconds, smashed the vols 1.5-2 points - only to see it go up in the next few minutes.
Very weird but definitely some interesting stuff going on. Bit disappointing from the futures standpoint though - didn’t move as much as I was expecting it to. On my way to work, I was contemplating all kinds of scenarios - too bad none of them came to fruition. Maybe it’s a good thing.
If I was a Greek citizen, as soon as my greek bank opened, I’d pull everything I could, keep a emergency stack of cash on hand and transfer everything else to a non-greek global bank.
Yesterday evening, after the referendum, I watched Günther Jauch (probably the most famous German politics talk show). They had a Syriza-soldier and a German communist pitted against a speaker of Chancellor Merkel’s CDU party and the former editor of Germany’s biggest tabloid. Man, that was one mean discussion and the best thing was the huge thunderstorm over Germany, with thunder so loud that the show producers were unable to cut it out. The best quote of that evening: “Greece has voted for dignity. I respect that. A people should be allowed to go down in dignity…[thunder in the background]”
^^^^
But most importantly, how was yesterday’s Tatort before Günther Jauch ?
whats the incentive for greece to ever repay any loan
just keep defaulting, seems there are no consequences…just dont f with putin pay him back first
anyone get a chance to see the wsj article on greece. it had a mardi gras feel about it. the pics they had at least. lol
Gross says Grexit has 70-80% possbility
I think the Greeks decided that they were screwed under all scenarios economically, and therefore wanted to regain their power to decide in what way they are going to go down the tubes. Remember that Austerity in return for haircuts and extensions of time to pay has been a policy for 5 years now and hasn’t really done all that much except to deepen the recession in Greece, so it’s not as if they refused to try it. They simply refused to continue it, and there’s no indication that continuing down that path would have made anything any better anyway.
Reintroducing the Drachma will be painful for Greece, but not necessarily all that much more painful than the Austerity plans of today. Lenders may cut off loans to Greece after all of this, but they were about to cut off loans in any case. At least with the Drachma, they can devalue. What they export other than “tourism” is unclear to me. It’s not a great course, but it’s not at all clear that it’s any worse than the alternatives, except that Euroland now needs to find some other sacrificial country to keep the Euro low. (I understand that it’s not guaranteed that the Drachma gets reintroduced, but it does look like this is the way it’s going now).
As to why countries will lend, high interest rates is one reason. People get attracted by the carry and figure they can sell or get out before the ish hits the fan.
I don’t think this is so awful. Germany doesn’t get to have everything it wants, and I guess that sounds really awful. But Germany will survive.
Their economy was steadily improving since 2010, right up until the new government took over. Austerity was working. Sure, it’s a slow and painful process, but no one said it was going to be easy.
Problem is the Greeks are lazy, entitled, and not so smart about economic issues. Hence why they’ve defaulted on roughly 50% of their debt over the last 100 years. They just suck at finance.
Ugh this guy. [facepalm]
I’ll bet opposite this dummy any day.
True, but sucking is relative. They suck relative to the Germans, which is why they ended up financially enslaved.
So basically a bunch of criminals. The only way it makes sense to ever loan to Greece is through asset-backed loans
Here’s a fun little sample
“In the wealthy, northern suburbs of Athens just 324 residents checked the box on their tax returns admitting that they owned pools. tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.”
http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?_r=0
what did the Greeks do in response?
Buy lots of green tarps to camoflouge their illegal tax-evading pools.
I could be wrong, but I’m staring at a chart of Greek nominal GDP (GKGDP on BB terminal) that shows GDP declining every year from 2008 onward (losing 25%). The real graph (GKGDCS) shows the same story. Over that period, the only improvement I can see is unemployment which spiked from 7.3% in 2008 to 27.9% in 2013 before showing dramatic improvement to 25.6% in 2015 owing to an overall labor force contraction of 5% over the same time period. During this time, the government has remained in deficit every year since, while the only debt reduction occurred during the 2012 debt restructuring (not via paydown). As a percentage of GDP (with GDP obviously being the driver and somewhat distorting the results), debt as increased from 103% in 2007 to 177% at current levels.
Since 2010, the rate of decline in GDP was slowing and actually turned positive.
https://research.stlouisfed.org/fred2/series/NAEXKP01GRQ657S
So basically the fall has decelerated?
I would think that it would be obvious that unless an economy is collapsing to zero that it would fall at a declining rate and possibly find support at some level. That is not an improving economy, but rather an economy that has finally stopped falling further. As I said, GDP, as measured by the IMF, Worldbank and Eurostat has not increased since 2008 and all of the stats I put forth stand as well. Showing a chart that shows no actual growth from the SL Fed and is based on the expenditure method does not undermine these facts.