If Eurozone defaults???
Hi guys:
I'm curious as to what you think would happen if the Eurozone defaults--what there be another collapse in the bonds/securitized products market? In 2008, many banks and hedgefunds were sued because their financial products collapsed, do you think this will happen again if Italy defaults?
Thanks!
I don't work in S&T myself, so I was just wondering if I can hear your opinion on things.... thank you!
My impression is that a number of countries that own european debt would be the more immediately at risk groups - Japan for instance, would probably be forced to restructure massively.
Greece has already defaulted. I am not sure what you mean by 'if Eurozone default'? You mean all PIIGS default? France?
After the Eurozone issues Euro bonds duhh...
In answer to the question, it's not worth thinking about. You can't alter the outcome and if you're not in a position to take advantage of either scenario, by the wording of your question it seems the case, so I wouldn't worry too much about it. It'll swirl and alter weekly for months, I've lost interest personally....
If you want real apocalypse outcomes go on ZeroHedge.
LOL. Only if they start to issue Euro bonds to solve this crisis. You are worrying about the next crisis already, when we can't seem to get out this one.
correct me if i am wrong. But "Eurozone" won't default as a whole.
You will have countries being gradually kicked out of the EU and ECB trying to print to save the banks
This will definitely boost gold due to inflation and take down euro dollar value.
However, besides this...i don't think anyone can safely say where the market is going after the printing. It will def boost the market a bit but the excitement might wear off and you see another 2008
Unless the ECB printed a shit ton of money, I think its likely that if Greece defaulted, France would go down next because so much of their money is in greek debt. Other countries in the eurozone would follow because theyre all connected in their banks holdings, and if the euro is massively devalued all at once it would cause more pain and negative gdp growth.
The entire Euro zone as a whole will not fail. We will see Germany exit the Euro before any chance of seeing the entire system collapse. If it does collapse it will send the entire European finance and banking system back to the dark ages. This will ultimately spread to our shores and also cause a tremendous panic in all open markets as there is not a single asset can be considered as safe under the scenario of an entire Euro zone collapse.
There's not enough physical gold including known reserves from mines not in production to match the amount of derivatives out there. Cash will be useless, so it will be back to bartering and the Amish will become the new overlord in the US as they know bartering better than anyone else.
hi guys,
thank you for the responses!
I'm just curious about this since I am considering taking a job in economic consulting, where most of the projects happen because banks and financial institutes get sued for failed products....I'm just trying to figure out if we will get more or less projects because of the eurozone crisis, that's all!
France is nowhere near default... They still have ridiculous social benefits for basically every guy and hist mother, one of the best healthcare systems in the world, and retire at 62. They can still cut a lot in the state budget before defaulting...
Hmm....will they cut them in time though? Nobody else has
The US can't decide what to cut. You think France is undergoes austerity easily?
The ECB won't print as of now, but if it were a matter of defaulting on yet-to-exist Eurobonds (unless you mean EFSF paper) you can bet they would hit the gas with little regard for inflation. As far as France goes, the retirement age is 67 and getting there from 65 was extremely difficult. However, for most of Europe, rising yields have much less to do with deficits (Italy has had a primary budget surplus for 5 years, France is cutting way back right now) but with the prospect of low-to nonexistent growth helping debt-to-GDP ratios balloon. France has a lower debt-to-GDP ratio than Germany but the problem doesn't lie there, it lies in growth expectations. And those aren't good right now, what with global deleveraging grinding on and the ECB's stern refusal to join the stimulus party being thrown by every other central bank in the world. The euro is too strong for countries on the periphery but weak enough only for Germany at this point. I would put the odds of a true default in the coming years pretty low (I really doubt someone will pull a Russia), but there are going to be some massive writedowns and a lot of financial players are going to end up going down. The odds of the euro going through some sort of breakup are no longer negligible but exactly how things will go down is impossible to know. My best suggestion would be to sit back, relax, and enjoy the show (maybe with some OTM EUR/USD puts in your back pocket).
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