Comments on: The Greek debt spreadsheet

By: cpeake

cpeake — Wed, 26 May 2010 03:22:58 +0000

Good little spreadsheet, love the projecting capability

I have had a stab myself at constructing a spreadsheet about the crisis.

http://data.inflexionary.com/inflexionar y/greek-debt

By: JustJustin

JustJustin — Fri, 16 Apr 2010 17:10:25 +0000

Felix–do you have one of these for Ireland? It would be great to see it. Any thoughts on Irish deflationary pressure? Having nationalized the banks, the government is in the process of getting the taxpayers to buyout all the caustic debt (through NAMA)–but will Ireland go the way of Greece?

By: Storyburncom_is

Storyburncom_is — Thu, 15 Apr 2010 17:15:10 +0000

Greece is going to continue to be a huge problem for Euro land until they default. That’s when the fun starts

By: HBC

HBC — Thu, 15 Apr 2010 15:45:08 +0000

Sorry Felix, but it’s really just a box with a load of numbers in it. The Greeks – the ones in charge, that is – had every incentive they could possibly need to get it right first time around, didn’t they? At least from their fellow countrymen’s perspective, they did.

And look what happened. No, they ought to be in a box.

By: Gotthardbahn

Gotthardbahn — Thu, 15 Apr 2010 14:59:49 +0000

Ghandiolfini: Canada in a monetary union with the US? No thanks. Our banking system is fine, thank you very much, and our federal government was paying down debt – fancy that, actually paying down debt – for many years before the financial crisis struck. Even now its annual deficit, around 5% of GDP, is manageable. The Brits wisely rejected adopting the Euro. Canadians will do the same in rejecting adoption of the greenback in any proposed monetary union.

By: Ghandiolfini

Ghandiolfini — Thu, 15 Apr 2010 14:29:28 +0000

Great model Felix Inc.

Y.Alekseyev is correct, maybe you can republish with his stats or maybe some other more realistic feedbacks. That would supply you with content for 196 days for 196 countries: “Salmon’s Global Barometer”, maybe working from the best to the worst (to give them time to fix their numbers). The overlooked and -cooked variables will come out in the wash.

MSwizzle: The only way the US will survive is to form a monetary union with: its own Alaska, Hawaii, Canada, Latin America and Southern America. That’s the only way to counter BRIC.

By: MSwizzle

MSwizzle — Thu, 15 Apr 2010 08:36:25 +0000

Considering Greece made it in I would say yes.

Officially the country must have a deficit below 3% of GDP and debt below 60%. If this is not the case the country has to sufficiently show that it is on the right path.

They also need stable prices (max 1.5% above lowest 3 countries in EMU), low interest rates (max 2% above lowest 3 in EMU), and stable a currency (not devalued against the Euro during the 2 year switching process).

You could make a case either way pretty easily. Considering if the US applied tomorrow the would have to fulfill all above criteria. Your feeling on the future US debt burden would weigh heavily on any opinion.

However, as I said Greece got in. IF the US was in the geographic area I would say with almost certainty they would be allowed in. Imagine the EMU without Germany or France. The US is a huge economy and would have to be a part of any monetary union.

Likewise, imagine Canada and Mexico creating a monetary union without the US. It would be absurd.

By: Trouble

Trouble — Thu, 15 Apr 2010 07:51:30 +0000

Can’t help wondering. If the U.S. qualified geographically, would it’s financial condition permit it to join the EU?

By: kitkat3

kitkat3 — Thu, 15 Apr 2010 05:11:52 +0000

Hang on – Greece can’t devalue because it’s part of the Euro. That’s why IMF’s Strauss-Kahn was saying it’s got to go through a period of deflation. Default is the only other possibility (and as Reinhart and Rogoff point out in “This Time is Different” default counts as any renegotiation of debt terms, basically), but that would put a lot of stress on others in Europe. If the EU wants to stay in business it’s got to back Greece up – shouldn’t have let it join in the first place if it ISN’T prepared to do that!

By: Y.Alekseyev

Y.Alekseyev — Thu, 15 Apr 2010 02:00:31 +0000

Greek assumptions seem rather unrealistic:
– primary balance is likely to be worse than stated as tax receipts continue to deteriorate (austerity does NOT help receipts)
– inflation is likely to be negative (see Latvia)
– interest rates for 2010 and 2011 are very likely to be higher than the stated 4.7%.

By: david3

david3 — Wed, 14 Apr 2010 20:02:03 +0000

If you want to know what tipping point has been for debt to GDP for countries that found themselves in a simular situation as Greece check out Carmen Reinhart’s supurb “This Time is Different Chartbook: Country Histories on Debt, Default, and Financial Crises”. It is only $5 and is free for journalists via NBER.

http://www.nber.org/papers/w15815