Korean Job Discussion Forums

[bacasper]

So which part of the world is actually in the worst position? It seems Europe is worse than America. And which is in the best? Please answer each question for the short, medium, and long term, defining each. In lieu of this, or for extra credit, make additional comments.

Europe debt crisis spreads to Portugal

By NICHOLAS PAPHITIS and PAN PYLAS, Associated Press Writers � Tue Apr 27, 7:03 pm ET

ATHENS � Greece was pushed to the brink of a financial abyss and started dragging another eurozone country � Portugal � down with it Tuesday, fueling fears of a continent-wide debt meltdown.

Stocks around the world tanked when ratings agency Standard & Poor's downgraded Greek bonds to junk status and downgraded Portugese bonds two notches, showing investors that Greece's financial contagion is spreading.

Major European exchanges fell more than 2.5 percent, and on Wall Street, the Dow Jones industrial average finished down more than 200 points. The euro slid more than 1 percent to nearly an eight-month low.

"We have the makings of a market crisis here," said Neil Mackinnon, global macro strategist at VTB Capital.

Greece is struggling with massive debt, and with prospects for economic growth weak it could end up in default. Its 15 eurozone partners and the International Monetary Fund have tried to calm the markets with a euro45 billion rescue package, but it hasn't worked.

Standard & Poor's warned that holders of Greek debt could take large losses in any restructuring, but a greater worry is that Greece's debt crisis is mushrooming to other debt-laden members of the eurozone.

One bailout can be dealt with but two will be stretching it, and there are fears that other weak economies could be pulled down in the Greek spiral � including Europe's fifth-largest, Spain. Can Germany, Europe's effective paymaster, continue to bail out the weaker members of the eurozone?

The crisis threatens to undermine the euro and make it harder and more expensive for all eurozone governments to borrow money.

It has also disrupted cooperation between eurozone governments, with Germany resisting the idea of bailing out Greece unless strict conditions are met.

Many investors think Greece will have enough money to avoid default in the coming weeks, but the future is cloudier.

Both Standard & Poor's and the Greek finance ministry insisted that the country will have enough money to make the euro8.5 billion bond payments due on May 19.

Even if it does, Greece faces years of austerity with living standards sharply reduced. Standard & Poor's warned that the Greek economy was unlikely to be as big as it was in 2008 for another decade.

cont'd at link

[bucheon bum]

I feel bad for Portugal. It has actually reduced spending over the past few years, has reformed its pension system a bit, etc... it just hasn't seen any economic growth, that's why it is in its current position. Quite a bit different than the prolific spender that is Greece.

[nautilus]

The strong and industrious northern europeans are being made to carry the lazy. inferior southern european peasants.

[mises]

It is hard to know which state the industry will tackle next. Portugal is a solid possibility.

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/05/03/the-great-reflation.aspx

[bacasper]

^ So they are not going to stop until they cannibalize the entire planet?

[mises]

[SeoulFinn]

Finland is supposed to lend Greece around 1 500 000 000� in the next three years. It's a lot of money, but it pales in comparison to Germany's 22 000 000 000�. I don't believe Greece can pay back the loan -- olives, wines and musakka can take you only that far.

Greece lied her way into EMU and probably into EU, too. Let Greece go to the cleaners and kick her from EMU: many banks will go bottom up and many people will lose their jobs. But hey, if the foundation is rotten, better to tear it down and start from the beginning.

Norway was damn smart to stay away from EU.

[4 months left]

Ireland borrowed to contribute and they delayed a bond offering last week because the yield was too high.

[SeoulFinn]

I found an article about Greece in the Financial Times. Looks like there's no "need" for the EU/EMU countries to pump untold billions of Euros to Greece. Greece has huge amounts of dosh in properties that they could sell to the private sector and fix their own mess that they made themselves. Only after that is done, and if still needed, EU should help them.

Can't link to the article directly. Sorry! If interested go to Financial Times and look for:

Privatisations offer Greece the best way to avoid a bail-out, by Michael Massourakis, Chief Economist, Alpha Bank.

[bucheon bum]

[SeoulFinn]

[blade]

This guy sums the whole so called "Greek bailout" rather well if you ask me.

[bucheon bum]

[English Matt]

[bucheon bum]