Comments on: Why should Americans care about Greece? http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: rruss http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14564 Fri, 07 May 2010 15:03:56 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14564 Why is it that the large majority of financial commentators, when talking about fiscal belt tightening. seem to focus on restrictions on entitlement programs like Social Security of Medicare. These programs do not have a more significant burden on the American tax payer than all the many ways that business is benefitted by governmental support. Why is it that Safety net social expenditures are characterized as the ones that will sink the fiscal integrity of our country, whereas all the ways the government supports business are characterized as necessary for our economic well-being. I would suggest that the well-being of individuals is at least as important as that of our businesses, and that any considerations of belt tightening should consider reductions in business subsidies.

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By: mckibbinusa http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14563 Fri, 07 May 2010 14:45:00 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14563 Here’s the question for Americans — would Californians accept austerities similar to those now being imposed upon Greece? For the specifics of how the “Greek plan” would translate into a “California plan,” visit the link below and post your opinion:

http://wjmc.blogspot.com/2010/05/how-wou ld-californians-react-to.html

Thank you for the opportunity to comment…

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By: nbywardslog http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14367 Tue, 04 May 2010 05:18:34 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14367 The two questions are indivisible.

You should worry in the same way that concern after World War II produced the Marshall Plan: the EU is a trading partner and a democracy (allegedly). There are at least five other members with roughly the same problems as Greece.

You should worry about Greece as a long-term parallel for the US: as in fine, get yourselves a decent healthcare system, but pay off more of that deficit than you do at the moment.

You should worry because Greek (and European) bond issues are getting a bad name. PIMCO, for example, has switched emphasis towards emerging economies, declaring EU debtors too high a risk. They’re right. One day in the future, this could easily apply to the US too.

You should worry because with the insane decision yesterday by the European Central Bank to let Greece exchange its junk bonds for Euros, the EU is effectively giving vodka to an alcoholic. If the Euro economies go bust, that makes a very weak market for expensive US goods. Further pressure on the Euro because of the undertakings now accepted by the ECB mean an expensive dollar. Great for US tourists, lousy for exports. And without more exports, the US deficit keeps climbing.

You should worry because the Germans (big on fiscal discipline) and French (let’s face it, they invented laissez-faire) have diametrically opposed views on how to deal with the big EU debtors. In the medium term, the whole EU fabric stands threatened by this inability to accept that Europe isn’t a bottomless pit of money. Were the EU to break up,you’d be back to 27 trading contacts rather than one – with the protectionist folks in the ascendancy.

You should worry because a weakened Europe won’t stand up to an increasingly expansionist Putin. Rasputin already has his eyes on the Ukraine, and he won’t pull out of Ossetia. Russia is the cutest player in the energy wars, and adept at cyber tactics to damage pcs involved in everything from security to trading.

So yup, you should worry already. But don’t think of it as Greece: think of it as a big, fat borderline repressive superstate about to collapse under the weight and hubris of its own bureaucrats. Its breakup may well be bad for America, but lots of Europeans will be glad to see the back of it.

Sincerely

nbyward
http://nbyslog.blogspot.com/

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By: HBC http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14357 Mon, 03 May 2010 22:14:35 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14357 Americans ought to care about the consequences of herbicidal warfare in Vietnam, but most of them don’t. Americans ought to care about the use of Willy Pete against civilians in Iraq, Gaza, Colombia etc. but again, they don’t. Americans won’t care about Wall Street’s asset-stripping of other sovereign nations until they realize it’s exactly what happened to their own back yard.

Then all of a sudden, they’ll care… a lot.

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By: MattJ http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14346 Mon, 03 May 2010 19:46:10 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14346 Default in Greece or elsewhere in Europe matters because of the follow on effects. Default means some assets are losing value; whoever holds those assets has lost money. This loss of value can lead to the debt-holders defaulting, and so on.

There are several European banks too large for their country to save, and there does not seem to be an effective cross-European institution to bail them out.

Finally, in a credit based economy such as ours, debt destruction is deflationary. Deflation is scary.

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By: wolphkaat http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14345 Mon, 03 May 2010 19:24:19 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14345 Speaking of bad analogies, stewart catches them by the bucketload in the goldman abacus reporting. I would avoid analogies all together Felix(not that you could ever come off as awkward as any of stewarts catches) and say that it matters to the average american due to market and currency stability and the ability for governments to continue fiscal planning to deal with the great recession.

http://www.thedailyshow.com/watch/mon-ap ril-19-2010/these-f–king-guys—goldman-sa chs

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By: dellbell http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14344 Mon, 03 May 2010 19:01:17 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14344 1. Financial crises don’t stay confined to the financial sector: they affect Main Street maybe worse than Wall Street/the City.

2. Isn’t Greece simply the first and worst of the sovereign debt dominos within the Eurozone? And if very many more of the dominos fall, aren’t we back in Financial Crisis II, with far less in the way of available resources to stem it/reflate the real economy?

3. Somebody at my work asked me if the U.S. or the U.S. banking system was exposed. The answer, from the FT’s work was, effectively, no–to the Greek government bonds. To the credit default swaps built on those bonds, real or synthetic, who knows? Citi could be insolvent, again, as we speak… (When I said that, he looked like he had swallowed a lemon.)

4. What others have said about the interconnectedness of the megabanks, made obvious by the Lehman fallout.

5. A cautionary tale of where the U.S. could be headed if we spend more decades singing “Don’t Worry, Be Happy”, with Vice Presidents who believe that “Deficits don’t matter”.

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By: hsvkitty http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14342 Mon, 03 May 2010 18:57:42 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14342 CDNrebel said:
My God! can Americans only reason by analogy?

Yes! First to CDN and then to Felix.

And they vote people into office for status and good looks as well.

Forgive them, as these things happen when profit and greed trumps adequate education.

Our monetary systems are too interconnected to not feel some ripple effect.

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By: CDNrebel http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14336 Mon, 03 May 2010 16:25:45 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14336 My God! can Americans only reason by analogy?

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By: JayTrader http://blogs.reuters.com/felix-salmon/2010/05/03/why-should-americans-care-about-greece/comment-page-1/#comment-14335 Mon, 03 May 2010 16:11:23 +0000 http://blogs.reuters.com/felix-salmon/?p=3669#comment-14335 1- The Average American Taxpayer probably doesn’t even know he or she is directly funding the IMF Bailout. US and Japan currently make up some 40% of the IMF. Both of these countries are in a deep deflationary asset cycles. Thus the drunken money printing/QE from these two countries to get inflated bubble values back.
If Greece Defaults, which they will, this poses another round of deflationary pressures which means just more QE, more drunken money printing, and more currency/deficit pressures.
2- Even though US Banking Institutions have minimal Direct Greek exposure, our banks have major exposure via European Banks. European and US Banking institutions are highly connected and tightly coupled.
3-Disruptions in US Markets like the fall out from Russia default form 1998.

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