Greek riots make global market blues even bluer

June 15, 2011

By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Images of riot police clubbing protesters through a fog of tear gas in Athens rammed home the severity of the Greek crisis to investors globally on Wednesday. With a vacuum of good news in the United States or China, it’s not surprising to see risky assets get hammered. The odd dot-com IPO aside, there’s little to bolster confidence.

The S&P 500 fell 1.7 percent as the euro dove below $1.42 and oil futures knocked $4 off the price of crude. The safe haven of U.S. Treasuries, meanwhile, shaved more than 0.12 percentage point off the yield on 10-year bonds, pushing it back below 3 percent

It wasn’t long ago that investors thought the worst was behind them. The biggest challenge was supposed to be exit strategies. The violence in the Greek capital, perhaps even more than Prime Minister George Papandreou’s offer to step down, reminded investors that concepts like default and austerity don’t always make the world, or markets, more stable.

Investors worry about Greece because a default, if it happens, won’t happen in a vacuum, thanks to its card-carrying euro zone membership. While banks have had ample time to reduce their exposure to all things Greek, default — if it were to happen — is untested in the single currency. In markets, unprecedented events can have unforeseen, and sometimes, very ugly consequences, especially when countries — like banks — are so integrated with their peers. Moody’s Investors Service, in fact, put several French banks on watch for a downgrade, due to their Hellenic exposure.

The sovereign debt crisis, however, isn’t new. But the latest developments come at a time when headlines in the world’s three largest economies have been particularly glum. The United States seems mired in yet another soft patch, China’s red-hot growth engine is sputtering and Japan is trying to emerge from a devastating earthquake and tsunami.

That could mean that sharp moves across global assets, like those that prevailed on Wednesday, are overdone. If the United States were cranking out new jobs, for example, it’s less likely that rioting Greeks would hold so much sway over markets in New York. Put it all together, though, and it’s hard to be too cheery.


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If the eurocrats wish to remain stubbornly tracked to an all encompassing euro area,sneakily trying to bring about their “ever closer union” offering the obvious no alternative to a fiscal union to the little piggies living in their med straw huts then two pressures are inevitably going to disavow their reccuring dreams.First the Greeks are giving the “up yours Delors”and clearly wont be told to vote on it till they tire enough to notch up the right answer and second the markets can blow in the EMF just as easily as it demolished the BOEs efforts to prop up an overvalued pound back when chancellors were given to singing in their baths after a good days kicking. Sure,some sort of euro area might still make sense centering on the Rhine confluence (but full political/fiscal union looks pretty optimistic,would’nt you say? Anyways even if the fiscals are on a different scale,think of how things panned out for the UK after black wednesday? The pound kept dropping for a while after (the markets merely keeping a good thing going) But the competitiveness gained by British exporters saw,in a few short years, the pound rising to about 3.10 DM or 1.55Euros. So perhaps the Greeks could do us all a favour,look selfishly to their own national interests(as Britain used to do)and seriously think about putting up a package of measures including privatisations to raise gov.finances bringing back the drachma, getting a real hold on gov.spending as a % of GDP and a controlled and limited negotiated default on their debt.For this the Greeks need to get a bit inspired by some of their ancient heros like the spartan who once replied to a threat from Alexander with a single word “IF”

Posted by oilatanyprice | Report as abusive

Of course these things happened but where were you when 1,000,000 people were in Athens to demand the “Not to IMF” message peacefully? Is it true that Greeks are protesting just for the austerity meters? No, in Greece we have a non-Violent Revolution for one and a half month against our so called “Government”! The first Revolution in the World against the Parliamentary Democracy! A Revolution for Direct Democracy as in Ancient Athens! We are creating our new institutions! Every night in Syntagma Sq. we have a massive direct democratic People’s Assembly. We don’t recognise our government any more! This is as well The First Revolution in the World against the globalized New World Order and International Economic Elite! That’s why all the Greeks are involved in this! We are united for the first time in History: National Socialists, Traditionalists, Fundamentalists, Nationalists, Conservatives, Liberals, Neo-Liberals, Social-Patriots, Socialists, Libertarians, Ecologists, Greens, Communists, Radical Left, Maoists, Stalinists, Trotskyists, Anarcho-syndicalists, Autonomists and Anarchists! 9 Metropolitans of the Greek Orthodox Church support the Revolted Greeks! Thousands of Orthodox clerics, monks and nuns, New and Old Calendarists! Even the ex-King of Greece Constantine the II send a message of Support to the Outraged Greeks! Even the believers of Ancient Greek pagan Religion fully support the Revolution. Have you ever seen the National (here Greek) flag accompanied by the Anarchist (Red and Black) flag in any place of the world than Greece (look at your photos)? Why you don’t say a word about it? Why don’t you say that the Greeks Orthodox believe that this so called Government wants to put RFID microchip to our IDs and this looks like the sign 666 of Antichrist and that’s why hundreds of thousands of Orthodox Christian Greeks are Revolting??? Even the atheists and the evolutionists support the Revolted Greeks! Even the majority of the members of the Greek gay Pride Parade joined the Revolted Greeks in Syntagma after they finished their parade! Even the Muslim, Roman Catholics, Protestant and Pentecostal Christians, Shik and Hindu (and etc.) foreign immigrants (legal and illegal) –Asian, African, ex-Soviet, Eastern European, Balkanian, Arabs – are sympathising this Revolt and helped the wounded people during the inhuman attack of the Police! The Greek people demand their dignity! They don’t want the money of the Bankers. They want National Sovereignty, Social Care Public System and International Solidarity with the Spanish Indignants and all the fighting Peoples of the World! This is a Revolution! The Wold Media are misleading presenting the current situation as Demonstrations against the Austerity metres. Only “The Guardian” presented things closer (just closer) to the Reality! Please inform your public with sincerity and truth! According to a recent official research, made by the Statistic Department of the Economic Faculty of The Athens University, the greatest majority of the Greeks fully support the Revolted Greeks (67.9%). The total majority believe that the Revolted Greeks are correct (80%)! [ ganaktismenon-i-pleiopsifia-ellinon.htm]

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[…] economy in pieces, a government caught in the headlights and there are rioters in the streets: it must be difficult for Greeks to believe in anything right now. Oh well, at least there’s […]

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