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Greek contagion
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3 November, 2011
Since yesterday, news reports are full of comments like this:
"Many economists fear
that if Greece exits the euro, it could lead to financial contagion, as
investors and ordinary bank depositors in other eurozone countries may
fear that their own government will follow suit."
What does this mean? Are the Spanish looking to the Greeks as a model? Esos
griegos tenían un gran éxito con su incumplimiento de las deudas. Hagámos
lo mismo.
Or is it a matter of queueing up? Greece has first dibs on default, and
Spain just has to wait its turn. Or is this setting up a resonance in a Sheldrakian
morphic field of default patterns? Perhaps we are witnessing the final
consummation of the marriage of 21st century mathematics and 20th century
pseudoscience that finance has been tending toward for the past three
decades (at least).
Surely the impact on investors will depend in part on the effects seen from
a Greek euro withdrawal. At the very least If we think back to recent
history, presumably any reasonable person would have thought, after the
Lehman Brothers shit-storm, that the US financial authorities would be less
likely to allow another similar bankruptcy to proceed. So, if Greece leaves
the euro in a ball of flames, Spain will be unlikely to see it as a model.
And if Greece's exit from the euro isn't so terrible then... maybe it's just
not so terrible.