an interesting read on greece's problems and how it may impact us down the road:
http://www.economicpopulist.org/cont...nd-ouzo-effect
in part:
"Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain.''
Speaking of little fires, its a good idea to keep an eye on Latvia, a nation with the same population of Dubai. Since the global credit crisis started in 2007, Latvia's economy has shrunk by 25% and is expected to shrink another 4% this year. Meanwhile, the IMF is demanding that the Latvian government cut its spending another 6%. This cannot continue much longer without a popular backlash.
The scale of this building sovereign crisis cannot be understated. Unless it gets contained quickly we could be looking at the next leg down in a global margin call.
The EU's refusal to offer Greece anything beyond stern words and a one-month deadline for harsher austerity – while admirable in one sense – is to misjudge how fast confidence is ebbing. Greece's drama has already metastasised into a wider systemic crisis. The world risks a replay of the Lehman collapse if this runs unchecked, this time involving sovereign dominoes.
The scale matches America's sub-prime/Alt-A adventure and assorted CDOs and SIVS of the Greenspan fling. The parallels are closer than Europe cares to admit.