A Greek drama

Does anyone have any thoughts on how/if the greece financial drama could impact on the global economy and the Australian property market?

It seems the trioka are prolonging the inevitable that there will be a grexit. It could become another Lehmann Brothers event that pulls down everybody else.

 

Really hard to predict what will happen, however it has been known for many years now that Greece is in trouble and not in a position to pay its debt. IMO markets have had plenty of time to price this in and who knows it might even be a positive for the Euro market.
Personally I don't think there will be a massive impact. Perhaps in the very short term, but there is no surprises here, everyone knows something is coming and I don't think the IMF is gonna budge on this one.

 

Yeah, it's not looking good for them.
The govt called a referendum before negotiations finished wtf...
Anyway, my money is on quick fix.last minute deal, just buying time measures. The longer term issues of Greek uncompetiteness are very serious and no one, not even the Greeks, can see a an easy solution. Eventually , they will have to make an exit, let the market price them where they may, and rebuild...long hard process of rebuilding and gaining competitiveness with peers.
What it means for us...not too much..an exit, whenever it comes no one knows, will mean the safe haven currencies and assets will do well- the Greenback, gold, real-estate etc.the aussie dollar will fall, but not crash . The A will fall less if non-mining is more established. Over time, there will be new normals and the market's will self adjust to those. It really means more to eurozone countries much more than us over here. We really are seen by many as the land of milk and honey.

 

Greece is like that friend you know that's like hey bro I got this sweet ass job where I get paid to sit around and do nothing. Except, everyone in the country scored the same type of job. And everyone was happy, until they weren't.

 

That's the perfect analogy. Coupled with their view that they are entitled to sit around do nothing and get paid... And no one is willing to get off their butt and do anything about it.

 

Ireland made the tough calls during the GFC, and they are in a much better position now.

Seems the concern isn't so much on greece, as the market has already priced it in. It's what happens to the other countries after the grexit, such as Spain and Italy. Their economies are much much bigger.

 

1. The market hasn't priced the drachma, comes into re-existance online if amd when they exit. It will be worth shiit if and when it's reintroduced.
2. Yes, and this is one key reason why lenders and eurozone countries do not want greece to exit:
1 of course because they have lent greece hundreds of billions of euros, and if greece goes, their capacity to repay.with drachmas will be bugger all
Thus lenders.are looking at massive write downs...
2. as you rightly said, this sets a dangerous precedent for other countries that are much larger and if they go as well, the impact will be felt very very hard for the Eurozone countries .

 

Yes very true.
The cost to keep a especially govt worker in greece is very significantly more than the value they produce.
This can and will result in only one outcome: foot up your ass...and the lenders ( IMF, Germany etc) have a very large foot size.

Such an attitude of entitlements, laziness, no ambition whatsoever etc...
And it's not just the old fellas with this...it's the younger worker as well , and that is a very significant issue.
Many more years of work culture, attitude changes coming up for them methinks.

 

traveling to greece in september

 

You're right of course, but lets not bag the greeks out totally without admitting we have a fair dose (and rising) of this in Australia as well. We are a staggeringly unproductive nation considering we are blessed with an abundance of natural resources. Even the slightest movement to address this problem creates howls of malcontent by the lefties and their media chums. So a bi-partisan attitude towards getting our own house in order would be a major step forward in improving the lot of future generations of Australians me thinks.

 

Yep. Although there is some waves made in the public sector , in brisbane at least , to lift their competiveness to that of the private sector.
The public sector corporate customers are asking questions such as 'why should we do business with you when we can get stuff for a better value (higher quality/lower cost) from the private sector?'...
Lol that sure has caused some changes...

Back in the day, the Americans were on a similar path ..looking at govt to hand out jobs for them...It partly prompted JFKs legendary speech 'ask not what your country can do for you, rather what you can do for your country'...
Took a while for the yanks to internalise it..but eventually got there...after some time...the result: google, Amazon, Microsoft, Salesforce.com, Starbucks etc...the wealth, gdp, and jobs created by these and many more is nothing short of staggering.

 

On a global scale, Australians have a pretty good work ethic and are quite highly regarded. A lot of the Australian mining industry is low cost and operates in the first quartile of producers. The problem is that before the mining boom was over, Australia did not invest in the knowledge economy or invest in a sovereign fund.

I remember going on holiday to Greece a few years ago anf was amazed how inefficient everything was.

 

I propose the EU trade Greece for Turkey...at least the latter has a reasonable economy...

 

I think they invested in a future fund...
http://www.futurefund.gov.au/ but yes there was hardly any investment in knowledge based industries which has rendered it somewhat uncompetitive in certain knowledge based industries. The lower dollar will help it become more cost competitive and that's why the rba wants it to be low.

 

Whao, there goes my back!

Next job I get I going to claim compo.

 

I'll be happy to trade mt druitt for greece...lol

 

Oooiii....The Druies are harder working than those Grecos....they still want pensions at 53...

 

Whao, easy does it JD. How many takeaways do you want in the Druitt?

 

Zimbabwe is a better option for the EU than Greece.