Posts Tagged ‘EU’
There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis. Just look to Greece and the financial industry as an example.
Moody’s is getting closer to seeing Greek’s debt the same way as I am. Greece was downgraded them from B1 to Caa1. This is the same rating as Cuba has. As expected the rescue in 2010 failed to prevent Greece’s default risk to be reduced satisfactory, and now another discussion for a second round of funds are being discussed. 50 percent of of those who receive a Caa1 rating have according to Moody’s defaulted on their debt.
The reason why the EU is so afraid of a Greek debt default now is because so many European banks are stuffed with this junk debt on their balance sheets, and most of these banks don’t have the financial strength to take any such writedowns at the current time. And the European Central Bank is so afraid if its implications that it has refused to entertain any talk about the holders of Greek sovereign debt taking a haircut — even in the form of Greece stretching out its payments. This is serious stuff. It is about time we realize that we don’t solve an alcoholics problems by serving him more Ouzo.