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Greek default

Article Index

We Have Tsipras and Merkel to Thank for This Market-Crushing Profit Play

By , Resource Specialist, Money Morning -

eurozone

Greek banks were hanging onto a cliff's edge by their fingernails when Greek and European parliaments and finance ministers debated the future of Greece within Europe.

But less than a week after the referendum that said "???!" (No!) to more austerity, Prime Minister Tsipras had already betrayed that vote, proposing considerable cuts in exchange for yet another lifeline.

That is just where our can-kicking profit opportunity lies...

Protect Your Wealth from Greek Fears

By , Money Morning -

greece crisis

The recent disquiet over Greece has been threatening the markets and dominating the headlines, but the best course of action for investors right now is to view it as more noise than signal.

The Greek situation has taken years to play out, and the levels of non-hedged global exposure to Greek debt have been drastically reduced since 2010. There has also been plenty of time to mitigate the risk of contagion that could result from a Greek default or even an exit from the euro.

Read more here...

Greek Vote Could Mean Short-Term Chaos

By , Money Morning -

Greek vote

Yesterday Keith sat down on FOX News while the markets roiled and distilled a very simple message about what's going wrong in Greece.

It's not primarily a political problem; it's a mathematical one. And until Greece - and an alarming number of Western governments, including the U.S. - realize that, the chaos will only continue.

Watch Keith here as he offers a valuable breakdown of Greece's woes and calmly summarizes the problem, just as he does regularly here at Money Morning...

Greece's Problems are the Tip of the Iceberg

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

dow jones industrial average today

America celebrates the July 4th holiday under the threat of homegrown terrorism while global financial markets face a trifecta of threats from Greece, Puerto Rico and China.

And those are just the immediate threats - the world still has to deal with the longer term threat of hundreds of trillions of dollars in debts that it can never hope to pay back and the pursuit of failed central bank policies that are destined to send markets over the cliff sooner rather than later...

The Greek Opportunity That's Being Missed

By , Resource Specialist, Money Morning -

Dow Jones Industrial Average

As Greece approaches its next payment deadline, the rhetoric and the stakes are boiling over.

The IMF recently quit negotiations in Brussels, saying it had reached a stalemate.

Then Greek Prime Minister Tsipras said the IMF had "criminal responsibility" for his country's debt crisis.

With a looming deadline, now Russia has stepped to the fore, with overtures of financial aid.

It might be too late - but with a "Grexit" appearing closer than ever, the markets remain calm.

Here's why, and how to profit...

Why a Greek Default Is a Global $360 Billion Problem That Affects Us All

By , Associate Editor, Money Morning • @JimBach22 -

A Greek default is inevitable. Years of piling up bailout loans without a reprieve in the Greek debt crisis prove that.

But it's not just the 300 billion or so euros in Greek debt are the problem. It's the complicated spider web of cross-collateralizations and derivative trades tied to Greek debt that are the real terror.

Here's how a Greek default could be a much bigger problem than you're being lead to believe...

What the Greek Debt Crisis Means for Markets and Your Money

By , Chief Investment Strategist, Money Map Report -

Greek debt crisis

All eyes are on Greek debt crisis this week, and rightfully so.

The country lied to get into the European Union, managed its finances terribly during its membership, and now wants to renege on its obligations. I'm not surprised and chances are you aren't either. We've been talking about the fallacy of central banking and the dangers associated with derivatives trading for years.

Now we need to talk about what happens next and, of course, what the Greek debt crisis means for your money...

Why a Greek Default Could be Worse Than the Lehman Collapse

By , Global Investing Specialist, Money Morning -

The 2008 collapse of Lehman Bros Holdings Inc. (PINK: LEHMQ) ignited a financial meltdown that resulted in widespread bank failures and caused the Dow Jones Industrial Average to lose 18% of its value in just one week.

Yet a Greek default - which (even with a bailout) becomes increasingly likely with each passing day - would actually be much, much worse in many respects.

Sure, it's possible that European Union (EU) taxpayers will soon be dragooned into yet another rescue plan. But that would only delay the inevitable - a catastrophic collapse that will drudge up feelings of panic we haven't witnessed since the global financial crisis hit its apex nearly three years ago.

Here's why.

Dodgy Debt and a Dozing Economy

Greece's debt, at about $430 billion, is less than that of Lehman Brothers, which owed around $600 billion at the time of its bankruptcy. But Greece's finances are much less sound.

Whereas Lehman Brothers participated in the 2003-07 financial bubble with considerable enthusiasm, accumulating vast amounts of the dodgy subprime mortgage paper whose value collapsed in the 2007-08 downturn, Greece's misdeeds date back much further - to its 1981 entry into the EU.

As the poorest member of that group, Greece became eligible for a vast array of inventive subsidies, primarily related to agriculture. However, the frauds the country perpetrated to justify even larger subsidies were even more inventive. And this allowed Greece to bring its living standards close to the EU average, while still being subsidized as if it was a genuinely poor country.

Indeed, Greece produced nothing close to the level of economic output that would be needed to justify its spending and the lifestyle of its people.

The problem for Greece is thus stark: Its people need to suffer a decline in living standards of about 30% to 40%, so that the country's output is sufficient to repay its debts.



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