It’s Not About Greece Anymore - Economix Blog. Louisa Gouliamaki/Agence France-Presse — Getty Images Protesters at the Acropolis in Athens waved flags and hung banners in front of the Parthenon. Peter Boone is chairman of the charity Effective Intervention and a research associate at the Center for Economic Performance at the London School of Economics. He is also a principal in Salute Capital Management Ltd. Simon Johnson, the former chief economist at the International Monetary Fund, is the co-author of “13 Bankers.” The Greek “rescue” package announced last weekend is dramatic, unprecedented and far from enough to stabilize the euro zone. The Greek government and the European Union leadership, prodded by the International Monetary Fund, are finally becoming realistic about the dire economic situation in Greece.
They have abandoned previous rounds of optimistic forecasts and have now admitted to a profoundly worse situation. This new program is honest enough to show why it is unlikely to succeed. Europe's Web of Debt - Graphic. 2010 European sovereign debt crisis - Wikipedia, the free encycl. Long-term interest rates (secondary market yields of government bonds with maturities of close to ten years) of all eurozone countries except Estonia.[1] A yield being more than 4% higher compared to the lowest comparable yield among the Eurozone states—i.e., yields above 6% in September 2011, indicates that financial markets have serious doubts about credit-worthiness of the state.[2] The Eurozone crisis (often erroneously referred to as the Euro crisis) is an ongoing crisis that has been affecting the countries of the Eurozone since early 2009, when a group of 10 central and eastern European banks asked for a bailout.[3] At the time, the European Commission released a forecast of a 1.8 per cent decline in EU economic output for 2009.[3] The ECB extended liquidity support to Hungary and Poland, while the EU contributed to Latvia's bail-out.[3] One researcher has held that this was a combined government debt crisis, a banking crisis and a growth and competitiveness crisis.[4]
Yes, Virginia. There is a Difference Between Greece and the US » If we learn the wrong lessons from Greece, our social safety net may wind up in tatters. Many market analysts, commentators and economists claim to be having a hard time finding a metric in which the US is in better financial shape than Greece. Ken Rogoff, for example, recently warned that a Greek default would usher in a series of sovereign defaults, and suggested recently on NPR that the crisis also had implications for the US. The historian Niall Ferguson made a similar claim a few months ago in the Financial Times. The cries of the deficit hawks grow louder: Repent all ye fiscal profligates, before the "day of reckoning" comes. Let's dial down the Biblical hysteria a wee bit while there's still time for rational debate. The relative performance of various currencies against the US dollar is highly instructive in this regard.
That the US has the reserve currency is an irrelevant consideration here. Why won't these deficits be inflationary? And the same logic applies for Greece. News Analysis - Bold Stroke May Be Beyond Europe’s Means - NYTim. Greece's sovereign-debt crunch: A very European crisis | The Eco. Illustration by Robert Venables SOME would say that tragedy was inevitable from the moment, nine years ago last month, when Greece was admitted to the euro zone.
Others would claim that woe was sure to befall such a disparate currency union sooner or later: if not Greece, then some other weak member of the club would have been the cause. Avoidable or not, trouble has arrived. At best, Greece has to undergo a dramatic budgetary tightening. Its fellow Europeans, or the IMF, may yet have to organise a humiliating bail-out. Some even talk—probably mistakenly—of the beginning of the end of the euro area. Last year Greece's budget deficit reached 12.7% of GDP. However, Greece and Europe are not out of trouble yet. If the Greeks do not regain the markets' confidence, they may fail to refinance the €20 billion ($28 billion) or so of debt that falls due in April and May. A marathon, not a sprint Greece has a long history of fiscal trouble. For Greece, membership was a boon. Coming Acropolis. Reuters Breakingviews - The Long Reach of a Foreign Crisis - NYT.
Ramin Talaie/Bloomberg News “Nude, Green Leaves and Bust,” by Picasso, sold Tuesday for $106.5 million. American investors got a sampling this week of what further deterioration in the euro zone could taste like. On the good side, investors rushed into perceived harbors: and Uncle Sam’s own debt. On the bad side, the swoon in prices of American shares and corporate debt indicated the long reach of a foreign crisis.
An encumbered euro zone economy isn’t good news for global growth, an essential ingredient in the still developing economic recovery in the United States. Then there is the interconnected global financial system. The is trying to keep its problems local, by helping Greece and stamping out brush fires breaking out in Portugal and Spain. The ’s involvement in the bailout also means that the United States is stretching itself further. Of course, the United States government benefits from the crisis in one important way, at least for a while.
Art as an Indicator. Timeline: Greece's economic crisis. Europe’s Debt Crisis: Your Questions Answered - Economix Blog - More Answers on Europe’s Debt Crisis - Economix Blog - NYTimes.c. Our panel of economists is back with another installment of answers to your questions about the Greek debt crisis and its repercussions. The panelists are Simon Johnson, the former chief economist at the International Monetary Fund, an author of “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown,” and a Daily Economist here at Economix; Carmen M. Reinhart, an economic historian at the University of Maryland whose recent book, “This Time Is Different,” chronicles 800 years’ worth of debt crises and sovereign defaults; and Yves Smith, the financial analyst behind the “Naked Capitalism” blog and “ECONned,” who heads Aurora Advisors, a management consulting firm specializing in corporate finance advisory and financial services.
The initial set of answers appeared on Monday. We’ll have more questions and answers later today. What is the future of the euro? Carmen M. Yves Smith: Many people think a fracture is inevitable. Carmen M. Euro Crisis Recalls Russia’s 1998 Monetary Meltdown - NYTimes.co. A decade ago Russia was walking in the same shoes as Greece is today, striving to restore confidence in government bonds by seeking a huge loan from the and other lenders. Then, as now, the debt crisis was roiling global financial markets. And hopes were pinned on a bailout — one that in Russia’s case did not work.
“Greece creates a remarkable sense of déjà vu,” Roland Nash, the head of research for Renaissance Capital investment bank in Moscow, wrote in a recent note to investors. The 1998 bailout designed for Russia, in the form of a rescue package offered by the International Monetary Fund, had the effect of forestalling but not preventing Russia’s defaulting on its foreign debt. During the month between the announced rescue and that default, Russian and Western banks frantically cashed out of short-term debt as it matured, changed the rubles into dollars and spirited the money out of Russia.
Edmond S. Mr. “Greece, fundamentally, does not have a debt problem,” Mr. Answers on Europe’s Debt Crisis, Part 3 - Economix Blog - NYTime. Our panel of economists is back with a final installment of answers to your questions about the Greek debt crisis and its repercussions. The panelists are Yves Smith, the financial analyst behind the “Naked Capitalism” blog and “ECONned,” who heads Aurora Advisors, a management consulting firm specializing in corporate finance advisory and financial services; Carmen M. Reinhart, an economic historian at the University of Maryland whose recent book, “This Time Is Different,” chronicles 800 years’ worth of debt crises and sovereign defaults; and Simon Johnson, the former chief economist at the International Monetary Fund, an author of “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown,” and a Daily Economist here at Economix.
The initial set of answers appeared on Monday, with more posted earlier today. What role does financial speculation play in this crisis? But “speculators” are also just people who think bad things are going to happen and move to protect themselves.