Interesting charts regarding the European situation from Bloomberg BRIEF:



Click to enlarge:




Bloomberg BRIEF
by Niraj Shah, Bloomberg Economist
May 24, 2012

Category: Bailouts, Credit

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Greek Crisis Monitor”

  1. stonedwino says:

    What I read from the charts is as follows: Greece & Portugal can and probably will leave the Euro without creating an existential crisis for the Eurozone. However, Spain looks likely to take the whole EU with it. I don’t see any way the current problems get fixed, including saving Spain (way too big & not enough $$$ to fix it)…I see the EU going back to its original members and a few countries exiting the Union, while the other countries currently on the periphery looking to get in, will have to re-evaluate their situation. If Greece, Portugal & Spain are such a mess as members of the EU, where does that leave the mess that is Hungary, Romania, Croatia, etc…

    I see no benefits for countries not currently in the EU to attempt to join – the discrepancy between those “new” member states and the old Wertern Europe is to wide to be bridged any time soon. Europe will end up getting fragmented into the old Western, Southern & Eastern Europe…not much has really changed since the 1950′s and 1960′s…I so not see any of the European countries giving up any further national sovereignty which would be a requirement for a stronger EU and Europe…the experiment has failed and we are seeing its unraveling before our very own eyes.

  2. RW says:

    The second chart — “debt weighs on growth” — succeeds in being both trivial and spurious: Trivial because a country in crisis loses revenue as it contracts so deficits increase dramatically (remember there is also a denominator) and spurious because it draws a causal conclusion from this correlation; that debt caused the lack of growth.

    The rest of the charts are only moderately illuminating except it is interesting to note that Greek GDP growth was generally faster than German until 2009. This of course renders the “debt weighs on growth” chart not only trivial and spurious but a non sequitur (irrelevant to the story the rest of the charts tell), a triple fail as it were; way to go Bloomberg.

  3. johnhaskell says:

    hat tip to RW for getting in ahead of me… the chart is basically a cloud plus Greece

  4. rktbrkr says:

    This is kind of like the GM & Chrysler “controlled BKs vs everything spinning out of control, they need some firebreaks. They need to throw out Greece before they pull down the temple.

    The situation in Spain is probably more ominous because the relatively large real estate exposure there will pull down the banks, regional govs and the national gov unless large amounts of cash are thrown at the problem – fast. Maybe germany will feel differently about that when they realize how many german second home owners will lose their lederhosen on their Spanish holiday homes if Spain goes pffft and exits the Euro zone.

    If Spain & Ireland are forced out of the Eurozone Americans will be able to buy cheep vacation property in Iberia and Hibernia just like the Euro’s have been snapping up Orlando Disney condos

  5. Tim says:

    Really excellent graphics. Kudos to Bloomberg BRIEF.

  6. Jojo says:

    Businessweek for week of May 28th has a number of good articles on the Greek situation:
    Who Lost the Euro?
    The single currency was supposed to create a common European identity–which is why it was doomed from the start

    What a Return to the Drachma Really Looks Like
    Import costs would skyrocket while borrowing would be almost impossible

    Greek Exit Could Trigger a Run on European Banks
    A Greek withdrawal from the euro “would be a Pandora’s box”

    Voices From Greece: ‘We Can All Go to Hell Together’
    Six residents of Athens share their views on the Greek crisis

    In Athens, Fear, Loathing, and Plenty of Parking
    As prospects dim, professionals look for a way out

    Greece’s Brain Drain Has Begun
    Yanis Varoufakis, the celebrity economist who warned of default, can’t afford to stay. Neither can many of his fellow academics

  7. DeDude says:

    Eventually the peripheral countries will realize that the only advantage to be in the Euro is to their own countries elite and to Germany. The fun begins when regular people in those countries realize that it is in their personal interest to just let their national and bank debts default and to exit the Euro.

  8. constantnormal says:

    @DeDude …

    “… The fun begins when regular people in those countries realize that it is in their personal interest to …”

    Actually, the FUN begins when they realize that they have no control over how their nation is being run … all the control lies in the hands of those who own the banksters …

    That’s when the “Arab Spring” spreads to the rest of the globe …