So it appears the Eurozone crisis has finally crossed the Rubicon. Greece is going to default on Monday and this likely will put in motion its departure from the currency union. The Eurozone as we know it may soon cease to exist.
Was this breakup inevitable? Many observers would say yes. The Eurozone, after all, is not an optimal currency area and therefore likely to create problems. Martin Feldstein, for example, in 1997 wrote this in Foreign Affairs:
Monnet was mistaken…
If EMU does come into existence, as now seems increasingly likely, it will change the political character of Europe in ways that could lead to conflicts in Europe…What are the reasons for such conflicts? In the beginning there would be important disagreements among the EMU member countries about the goals and methods of monetary policy. Continue reading “The Inevitable Grexit”
The only financial magazine that I read is The Economist . As in my previous post we indicated that Greece is not a new story. It all started in 2010, when economist published about Greece as themed cover. Its been 5 years and the visual theme for Economist are appealing .
Published : April 30 2010 : The Sovereign debt crisis spiralled out of control in May 2010
Continue reading “The Economist & GREECE”
The problems of Greece is not new, long before the financial crisis hits the global economy in 2008-09, Greece was in trouble. The combination of structural economic weakness and high structural deficits were compounded by a culture where tax evasion and corruption are both widespread and, to a large extent, acceptable and Euro became the scapegoat. The Euro is a scapegoat. Hard currency is not inherently bad. The real problems are: Continue reading “Is Greece a failed state now”
For the better part of a decade now, the world has been hearing stories about financial woes in Greece in addition to growing tension between the Greeks and other European countries taking part in the Euro system. For those who aren’t particularly attached to the Euro or major European industries for purposes of investment, it’s been easy to gloss over these stories; from afar, it’s simple to shrug off the news and assume everything will work out.
But who would have really thought that this far into the apparent success of the single currency system in Europe, Greece might actually be on its way out? According to some off the latest reports regarding current debt management negotiations and Greek impact on the Euro and European stocks, a departure from the Euro has become a real possibility for Athens.
Following the latest breakdown in debt negotiations between the International Monetary Fund and Greek officials this past week, Reuters made note of “another setback in Greek debt talks took their toll on European markets.” The article goes on to mention that “Greek assets bore the brunt of the pain,” and yet as negotiations with the potentially defaulting nation continue to go poorly, there’s a growing sense among some that the Euro as a whole will continue to be held down. Continue reading “Greece & The Euro”
I have done series of random posts on this topic; it always questions the investor’s behavioral aspect. The term “Greed” may not be a better word for the society but as Gordon Gekko said “The point is, ladies and gentleman, that greed, for lack of a better word, is good.
Sharing you a classic example of an institutional investor – NatWest markets bought shares of HDFC Bank in 1995 for Rs.40 crores.
Few years down the line, in 1999, they sold the same for Rs.400 crores. Money multiplied by 10 times in 5 years
NatWest might have patted themselves on their back for such a wise decision. It’s a rarity to make 10X money in 5 years. Continue reading “Greed and the Market”