14-Jan-12 WV-Greece bailout talks near collapse

[John]

e120114 14-Jan-12 World View -- Greece bailout talks near collapse as S&P downgrades European countries

Taiwan's presidential elections crucial to relationship with China


** 14-Jan-12 World View -- Greece bailout talks near collapse as S&P downgrades European countries
** http://www.generationaldynamics.com/cgi ... 14#e120114



Contents:
Greece bankruptcy threat looms as bailout negotiations collapse
S&P downgrades France and other European countries
The Growing Influence of the Ultra-Orthodox in Israel
Taiwan's presidential elections crucial to relationship with China
The '1992 Consensus' becomes Taiwan's big campaign issue


Keys:
Generational Dynamics, Greece, Institute of International Finance,
IIF, Evangelos Venizelos, Standard & Poor's, EFSF, France,
Germany, Taiwan, China, Ma Ying-jeou, Kuomintang, KMT,
Democratic Progressive Party, DPP, Mao Zedong,
Communist Revolution, Tiananmen Square massacre,
Wild Lily rebellion, 1992 Consensus, Israel,
Ultra-Orthodox, Women of the Shawl

[Trevor]

I'm not surprised the talks in Greece are near collapse. Investors don't want to lose what amounts to virtually all of their money they invested in Greece. Greece is not going to cut a damn thing, which they have made perfectly clear.

I checked Italy's new bond rating, which is now BBB+; that's only slightly about junk status; I'm expecting this to have an impact on their bond yields. They're the real concern now, since it's not possible to bail them out. I read an article that stated that even more downgrades are supposed to come tomorrow, although I think they already have.

The question is: what are the other two agencies going to do? Will they be planning a mass downgrade of their own or will they keep the status quo?

[OLD1953]

I've no doubt the other agencies will downgrade, it may be a few weeks though.

As the ultra orthodox take more and more control of Israel, the US special relationship with Israel will become more and more distasteful to US voters. As the common images from Israel will show more and more similarity to street scenes from wholly Muslim/Sharia countries and the news becomes more and more similar, there will not be a reason apparent to many people as to why we'd support Israel over any other Mid East nation. In the very near future, unblinking support of Israel will become a political kiss of death.

[Trevor]

We'll see if the United States is included in this wave of downgrades. Last August proved we aren't immune from this and all three agencies have a negative outlook, not that I'm surprised at that.

Right now, what worries me the most is Italy. They're the 8th largest economy in the world, 3rd largest in the eurozone, and if their bond rating is only slightly above junk, that does not bode well for everyone else. Another open question is whether Greece will survive March without going into default.

[OLD1953]

The zone is kind of like a believer in faith healing now, if Greece is healed, Italy will also be healed. Therefore, I expect them to do everything imaginable to preserve Greece, and perhaps let Italy slide past recovery while they remain focused on Greece.

[Trevor]

well, that's all they've got at this point. It's not like they can do much for Italy, anyway, considering their size.