bookies offering 4/7 that Greece will get a 'default' rating from the credit ratings agencies...(6 Posts)
Paddy Power bookies are saying this about Greece:
'Greece is now odds on to receive a default rating from Standard & Poors after the ratings agency announced that French led proposals would amount to a default under the firms rating criteria.
'Paddy Power has Greece at 4/7 to receive a default rating and 5/4 to avoid such a rating before the end of 2011. Odds are also available on the next S&P downgrade for Greece with before the end of September 2011 the favourite at 4/6 and July to December 2012 a less likely occurrence at 12/1.
'The news raises further concerns on the future of the Eurozone and Paddy Power have cut the odds on the Eurozone to break up by 2015 to 6/5 from 13/8 and a break up by 2020 is 8/13 down from 5/6.
So much for the EU's attempts to pile austerity measures on austerity measures... doesn't seem to be fooling the credit reference agencies. Aren't the proposals essentially just another bank bail-out, this time of the German/French/British banks that foolishly made bad investments? Shouldn't the banks have to shoulder at least part of the pain - by re-scheduling debt repayments, perhaps?
Feel very sorry for the Greek people, being hit with savage austerity measures that aren't going to work anyway. It wasn't ordinary people who got them into this mess, surely, it was politicians and bankers... (and tax-dogers - although that does seem to be the national game in Greece).
The problem isn't Greece. Well not the big problem anyway.
Personally I think a Greek default is inevitable but what the EU are scared stiff of is what happens next.
Well firstly most of the Greek debt is owed to French & German banks. Hence they've on the forefront of pushing austerity down the Greek's throats. If Greece defaults, the fear is that the German & French govt's will have to bailout their banks.
But more importantly it's how the market will react next. The elephant in the room right now is the rest of the PIGS countries. Ireland and Spain have massive debts too which are too large for even French & German governments to rescue and makes Greece's debts look puny in comparison.
Oh and one big lesson learned is noone knows how interconnected the banks all are. So if Greece defaults, a french bank may lose billions and go bust. In return it might appear that said French bank borrowed those billions from a UK bank whom in turn borrowed it from a US bank.
So the bottom line is that governments are shitting themselves this thing will break out like a viral infection and making the banking crisis of a couple of years ago look like a walk in the park. And to avoid that, they'd rather throw the Greek's to the wolves.
This clip on Youtube explains it rather well and although it's a comedy sketch, it's very VERY true. Clarke & Dawe
Yup, can't argue with any of that. If I were Greek, I'd be pretty pissed off with my own national politicians, international banks, the EU, the IMF, Uncle Tom Cobbleigh and all...
Thing is, though, the EU's supposed answer to the crisis, forcing austerity measures on top of austerity measures, isn't going to work, is it? It will just strangle the Greek economy. Are they just doing it as a temporary fix to hold the markets and credit reference agencies off for a few months?
And WHY haven't the politicians gone for reform in answer to the last banking crisis? Why haven't they said, right, things have clearly gone disastrously wrong, let's think again about how this system works, whether it's doing what we need, and what safeguards need to be in place?
So if the Greek govt put the lot on it not going tits up, it would be not bad odds and could be a virtuous spiral of self fulfilling prophecy?
Because the politicians are scared of the banks - they hold too much power even now. In Canada, where the banks are beholden to the politicians and behave themselves, none of this has happened and Canada's recession was over in a single quarter.
I don't feel sorry for them. Yes, others got into this mess, but other ordinary people shouldn't have to pay to bail them out.
Ridiculous to think paying taxes are optional and people can retire for life in their 50s.
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