Misc. Thoughts on Greece

While I was working out today, I was watching Bloomberg TV.  Needless to say, there was a regular rotation through the developments in Greece.

The Greek PM was telling the Parliament that default was not an option as members of the coalition were resigning.  I don't understand how a contractual write down of outstanding debt is not a default.  Just because the bondholders agree to this does not avoid the definition of default.  Greece is in the process of defaulting and there is no way to describe it otherwise.

One of the Rating Agencies said a failure of Greece to get its funding would result in a disorderly default.  Well it might be disorderly for anyone residing in Greece (I can imagine all kinds of horrible paths internally if the banking system fails), but the rest of the world will move on.  There will be some contagion in Portugal and perhaps Spain, Italy and Ireland, but nothing will motivate those countries to get their act together like seeing the horror in Greece if the banking system starts to fail.  The standard of living will return to that of 500 years ago.  I hope everyone knows how to farm their family plot.

Meanwhile, the Greeks themselves are showing they do not understand that you cannot get government handouts when the government cannot print money, and when you can print money, you cannot print unlimited amounts of it without running out of imports (i.e. the gasoline they put in their motorcycles to drive the molotov cocktail (gasoline again) to the protest).  If the Greeks don't agree to this deal, they might as well leave the Euro and at least make the place cost competitive for tourists.