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Post by jeffolie on Apr 28, 2010 11:13:35 GMT -6
Roubini: "In A Few Days Time, There Might Not Be A Eurozone For Us To Discuss" Provided by The Business Insider, April 28, 2010: When it comes to the PIIGS, Dr. Doom is in full-on doom mode. Felix Salmon has some good notes on a PIIGS panel from the Milken Global Conference, which included Nouriel Roubini, who is in his wheelhouse when talking about sovereign debt crises. Nouriel, of course, takes that kind of thinking to its logical conclusion, and kicked off the panel by announcing that it was just in time: “in a few days,” he said, “there might not be a eurozone for us to discuss.” There's no way that Greece can implement the 10% spending cut it needs to do in order to stop its debt spiralling out of control at current interest rates — and even if it did, the economic effects would be disastrous. Nouriel's base case, then, is Argentina 2001: after all, Greece has a much higher debt-to-GDP ratio, much higher deficit-to-GDP ratio, and much higher current-account deficit than Argentina had back then. And if that's the base case, there's no way that Greek debt should be trading anywhere near its current levels. And guess what: Spain is worse than Greece, says Roubini. Ugh. Read Felix's full post here > blogs.reuters.com/felix-salmon/2010/04/28/roubini-on-greece/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+felix-all+%28Felix+Salmon+-+All%29finance.yahoo.com/tech-ticker/roubini-%22in-a-few-days-time-there-might-not-be-a-eurozone-for-us-to-discuss%22-475099.html
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Post by jeffolie on Apr 28, 2010 11:47:20 GMT -6
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Post by kramer on Apr 28, 2010 19:56:48 GMT -6
What's causing all of this debt in these countries? Social programs and lavish union benefits?
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Post by waltc on Apr 28, 2010 21:12:24 GMT -6
Kramer,
IMS, Greece's problems are fourfold.
1)Their government is socialist which thought putting everyone on the government work rolls was a good idea. 2)Half of their economy is underground and thereby avoids the VAT. 3)Most of their workers are employed by the government. 4)Most Greeks cheat on their taxes.
This all adds up to a disaster of Titanic proportions. They either start firing their massive government workforce of deadbeats and busting up the underground economy or they end up at the bottom of the Aegean economically.
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Post by fredorbob on Apr 28, 2010 21:32:31 GMT -6
What's causing all of this debt in these countries? Social programs and lavish union benefits? Probably the same thing that's happening to some US states like California. Loss of manufacturing base combined with Green-Communism.
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