Greek crisis at the tipping point
Unnervingly, it is starting to look like the answer may be yes. Policymakers this week failed yet again to take decisive action on Greece’s debt crisis, rattling markets and prompting billionaire George Soros to brand officials’ failure to restructure Greek debt a “mistake.”
The central problem — beyond Greece’s running out of money again — is a standoff between bailout-shy politicians and instability-fearing central bankers. The assumption has been that they would come to their senses and make a deal to forestall catastrophe.
But their little game of chicken souvlaki now threatens to jolt Europe and perhaps the world with a new financial disaster.
On cue, Moody’s warned Wednesday that a Greek default – which is looking likelier by the day — could ripple across the European banking system. It put three big French banks on review for a possible downgrade and warned that other reviews may follow.
“We are closely monitoring the risks that would likely result from a Greek default scenario,” Moody’s said in announcing its review of Credit Agricole, BNP Paribas and Societe Generale. It noted “the potential impact on weaker countries, the capital markets, and funding conditions,” and said it is “taking those risks into consideration in our ratings of banks across the Eurozone.”
Markets, after ignoring the Greek time bomb for months, are starting to act appropriately terrified. U.S. stocks declined again Wednesday, as the dollar rose against the euro. Government bond prices across Europe’s troubled periphery continued to sink.
The latest sovereign bond selloff took the yield on 10-year debt to 18% in Greece, 12% in Ireland and 11% in Portugal. So much for the bailouts of those countries lifting the siege mentality.
Shared with this ministry January, 2011: [ The Coming of the Son of Man ] “Then there will be signs in the sun, moon, and stars; and there will be anguish on the earth among nations bewildered by the roaring sea and waves.”
You’ve seen the signs in the heavenly three, and that of the “roaring sea and waves” is representative of the people roaring, and the waves of discontent they ripple their governments with. As the financial collapse has effected all nations because all followed suit, so to will all feel the ripples of discontent as the domino effect takes place.