Yes this is overblown against the world economy, but it is justified by the notion of a country going bankrupt. Yes it is a small country but it is still in the Euro zone and affects many creditors who are over-invested in the country. Luckily i'm not owed any money by Greece.
Hehe yeah though even if you had a lot in Greek bonds back in the day, chances are it's not going to be worth much anymore. But I doubt it will be worth anything in a year or so... if I had some I would press the sell button. Alternatively you could gamble that the ECB/IMF bend once again and sell straight after (if) that happens.
What I don't understand is that the EU has given Greece every opportunity to renegotiate the deal so it's not as if they haven't had enough chances to come to some agreement. If Greece want to be able to walk away without paying anything back, then I think they're in for a shock. Patience is already wearing thin and there's only so long the EU are prepared to wait.
I am following the national press agency -- http://www.amna.gr/english/ -- based in Athens, rather than view the story through the filters of the IMF and the Eurozone countries. As of this moment, it appears the Greek parliament has kicked the can to next Sunday, putting the vote on the European bailout to the Greek voters. I follow the IMF at http://imf.org and Twitter via @IMFNews for their side of the chaos. FWIW, the IMF says the vote is meaningless as the proposed agreement expires Tuesday, days before the scheduled vote. Blackrock suggested investors ignore the noise. http://www.bloomberg.com/news/artic...rom-greece-blackrock-s-kapito-tells-investors Nothing to see, move along.
So as long as it does not effect our portfolios it should not be considered "big news"? That strikes me as a very very narrow point of view. A national leaving the Eurozone would be unprecedented. There are implication for the IMF and the euro as a currency. It is huge international news that Greece may effectively go bankrupt and every Greek bank be declared insolvent. They may have to invent a new currency. Is that not *fascinating* and is that not what makes it news? IMHO being an investor without being interested in how economies and currencies actually work is barely scraping the surface of the issue. And that is not even getting to what the implications might be if Greece turns for Russia for support (albeit, support Russia is probably too broke to provide).
Who knows how this will play out but I think one of the key concerns is contagion. As it stands and from what we can see it might not seem an issue. But when there's a dislocation from any integrated financial system there's always the risk of things that have been hidden or simply misunderstood coming to the fore. The bursting of the housing bubble in the US turned out to be about a lot more than just property - it was the packaging of bad loans that were resold and reconfigured that was at the heart of the financial crisis. It's all about the unknowns. And again, this has all been in an environment of very low interest rates as well. Who knows what gets uncovered when rates rise.
Greek is just a speck on the world stage and half a drop in the world economic bucket, but I think this has the power to make a few waves. Not big ones, but still some waves. This will have a big impact on the future of the eurozone.
