Well… today… Greece has decided to put its bailout terms to a referendum. This is either clever or insane … and either way I think things are going to get very interesting before they settle down.
If this spreads to Italy (already at 120% debt to GDP) and onwards? Some massive proportion of bonds are covered by Credit Default Swaps – basically insurance which is taken out to cover the “risk” of a country going bankrupt. Unfortunately, the numbers are so massive that the banks who are covering these contracts will, most likely, go bankrupt when the contracts are called in. Most of those banks are (apparently) American (and maybe British).
And after all that, China will probably swoop in and buy up all the distressed assets they like with their fat wadges of cash. Clever.
(other than this – last couple of weekends have been ChCh bound – being quite lazy which has been lovely. Also, my instructor at Outward Bound (Viv) was down – and it was really lovely seeing her again. Had a dinner for my watchmates – and definitely need to learn how to make cocktails from Mike)
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