Fear of Greek economical default and its after effects

Latest CNN News: Experts agree that it is almost certain that Greece is not able to pay all his debts. But if the country is not in default of payment, what happens next

Greek leaders are struggling to agree to a series of painful budget cuts, including layoffs and new fees to get the next round of cash bailout from its European partners. But Greece is in the midst of a painful recession, tax revenues and reduce feeding to deeper in the hole in the deficit.

And even if the Greek and European officials agree on measures to reduce the deficit, the bailout must lead to a gauntlet of 17 separate votes in European parliaments. Just last week sent the message that had the Austrian Parliament fails to set a timetable for a vote in European and U.S. markets fell sharply.

Meanwhile latest cnn news reported that, investors trading in credit default swaps, which essentially paris on whether there is a delay, prices are now almost A100% chance of default on debt Greek.

 

Errors could lead investors in Greece to escape the debt of other European economies in trouble, including Portugal, Ireland, Italy and Spain. Commercial investors in the credit default swaps are now placing the credit risk in these countries between 28% to 66%.

While Greece has only about 300.000.000.000 € (€ 411 billion) in outstanding debt, which are probably largely in the hands of European banks, all five countries by debt and is € 2.8 billion (3.8 trillion).

 

Spain and Italy are particularly worrying. When these failed states, the European authorities would not have enough money to bail out everyone.

 

"You can survive a failure of Greek. You can probably survive, if Portugal and Ireland to rise or fall," said Jay Bryson, international economist with Wells Fargo Securities. "But you are Italy and Spain, now we start talking about real money here. You can easily talk about depreciation of € 1000000000. It would be a disaster. "

 

While expecting some experts, it can cause a child to be adopted by default on the Greek debt that does not ripple proved by the financial system, the collapse of Lehman Brothers in 2008 already, that know no one can say what would be the impact of a failure.

 

"I do not know if 'default' is an oxymoron," said John Makin, Resident Fellow at the American Enterprise Institute, a think tank. "It is a very difficult situation to control. We are more prepared this time, when we were in 2008. U.S. banks are better capitalized, so we should be able to avoid the seizure scenario. But it is still touch and go ".

<p style="text-align: justify;">And a wave of defaults European debt will turn Europe into a recession, what a hit U.S. economy already on the risk of falling into a recession ADouble.</p>

"European financial burden has clear implications for economic prospects outside the euro area," wrote Goldman Sachs economists in a note Monday "U.S. growth of three main channels may be affected: .. tightening of U.S. financial conditions, the availability decrease of credit and the weakness of U.S. exports "And even if the Greek and European officials agree on measures to reduce the deficit, the bailout must lead to a gauntlet of 17 separate votes in European parliaments. Just last week sent the message that had the Austrian Parliament fails to set a timetable for a vote in European and U.S. markets fell sharply. Meanwhile, investors trading in credit default swaps, which essentially paris on whether there is a delay, prices are now almost A100% chance of default on debt Greek. Errors could lead investors in Greece to escape the debt of other European economies in trouble, including Portugal, Ireland, Italy and Spain. Commercial investors in the credit default swaps are now placing the credit risk in these countries between 28% to 66%. While Greece has only about 300.000.000.000 € (€ 411 billion) in outstanding debt, which are probably largely in the hands of European banks, all five countries by debt and is € 2.8 billion (3.8 trillion). Spain and Italy are particularly worrying. When these failed states, the European authorities would not have enough money to bail out everyone. "You can survive a failure of Greek. You can probably survive, if Portugal and Ireland to rise or fall," said Jay Bryson, international economist with Wells Fargo Securities. "But you are Italy and Spain, now we start talking about real money here. You can easily talk about depreciation of € 1000000000. It would be a disaster. " While expecting some experts, it can cause a child to be adopted by default on the Greek debt that does not ripple proved by the financial system, the collapse of Lehman Brothers in 2008 already, that know no one can say what would be the impact of a failure. "I do not know if 'default' is an oxymoron," said John Makin, Resident Fellow at the American Enterprise Institute, a think tank. "It is a very difficult situation to control. We are more prepared this time, when we were in 2008. U.S. banks are better capitalized, so we should be able to avoid the seizure scenario. But it is still touch and go ".

And a wave of defaults European debt will turn Europe into a recession, what a hit U.S. economy already on the risk of falling into a recession ADouble.

"European financial burden has clear implications for economic prospects outside the euro area," wrote Goldman Sachs economists in a note Monday "U.S. growth of three main channels may be affected: .. tightening of U.S. financial conditions, the availability decrease of credit and the weakness of U.S. exports "