Wait a minute, let me get this straight - If Greece defaults

[Green Mango]

From the perspective of the Greek economy chucking good money after bad certainly isn't the answer. Personally I think a protocol for exiting the € in an orderly manner needs to be put in place sooner rather than later and Stavros and friends need to take advantage of it.

The Greeks are going to default, it is just when they actually do it which is the question.

These new bailouts will just gain us a little time. In that time hopefully they will restructure the debt ie the lenders will have to accept losses on their loans.

Besides Greece: Portugal, Ireland and Spain are supposed to be the next time bombs, but Italy also have sizable problems.

All in all it will take years/decades to sort out with many debt restructurings, bailouts and defaults along the road.

[doodab]

It looks like George Soros agrees.

Soros Says Euro-Member Exit Mechanism Is

[centurian]

Germany and France are up to their eyeballs in it compared to us.

They are up to their eyeballs. I think the suggestion is that many of them insured their eyeballs - and guess who insured them...

The problem is that it's so hard to work out who owes what to whom. If you buy a car, you can also get insurance for it. If something goes wrong, you know who to claim from.

If you buy a bond, you can buy a CDS to hedge the risk. But then you can sell the bond, keep the CDS - or sell the CDS - or package one or the other, or both, into other products and sell those - which attracts their own CDS's etc. Run this through a few iterations and no-one really knows how much one organisation is exposed until the dominos start to fall.

[scooterscot]

It looks like George Soros agrees.

Soros Says Euro-Member Exit Mechanism Is

Great. Do we think that will make the euro stronger or weaker if a weaker country leaves the currency?

If a rotten egg is chucked the basket becomes wealthier, no?

[centurian]

If a rotten egg is chucked the basket becomes wealthier, no?

Unless the rotten egg has already infected the rest of the basket.

In which case, you're just plain tuliped.

[DodgyAgent]

[



Perhaps Britain should just join the euro, you know better the devil you know and all that.

Why on earth would anyone after all that has happened be stupid enough now to join the Euro?

[scooterscot]

[



Perhaps Britain should just join the euro, you know better the devil you know and all that.

Why on earth would anyone after all that has happened be stupid enough now to join the Euro?

Well we've not exactly got a track record in fiscal righteousness, have we?

All this talk of 'we got our own currency' we're saved! In my eyes the people of Britain are seen very much as a commodity, a way out, they'll pay no matter what. I'm beginning to think it's true. I admire the Greek people challenging the status quo.

What we've actually got is out of control inflation and a standard of living that continues to decline. Year on year you've seen the £ in your pocket become weaker and weaker, what are you defending?

[minestrone]

They are up to their eyeballs. I think the suggestion is that many of them insured their eyeballs - and guess who insured them...

The problem is that it's so hard to work out who owes what to whom. If you buy a car, you can also get insurance for it. If something goes wrong, you know who to claim from.

If you buy a bond, you can buy a CDS to hedge the risk. But then you can sell the bond, keep the CDS - or sell the CDS - or package one or the other, or both, into other products and sell those - which attracts their own CDS's etc. Run this through a few iterations and no-one really knows how much one organisation is exposed until the dominos start to fall.

We are all contractors and we should all be investing in markets, I do not think anyone has one penny invested in Greece.

[Paddy]

Here is another scenario.

Goldman Sachs basically knew the true situation in Greece because they helped the then government cook the books. Quite a lot of other banks didn't, and sold credit derivatives which priced the risk of default based on the distorted information. Goldman and the speculators they service may or may not have taken a massive bet against various eurozone goverments defaulting (as they were accused of doing by EU ministers when all this kicked off) and may or may not stand to make a ******* ****load of cash when the chickens come home to roost.

All I'm saying is I'll be very surprised if GS are one of the institutions which stand to lose from a default.

WDS

I suppose it's a bit like remortgaging a worthless property when the broker over values your home several times over. You spend the borrowed money and come payback day you then realise your home isn’t even worth the wallpaper on the walls.

[centurian]

We are all contractors and we should all be investing in markets, I do not think anyone has one penny invested in Greece.

No, but you probably have quite a few pennies invested in funds/products that have invested in Greece - even though they don't know it themselves until the dominos start falling.