>>Greece, by itself, cannot bring down the Euro, as I've previously stated they are the first domino. The Euro could likely survive a Greek default as well as Portugal and maybe Italy. It cannot survive more than one and it cannot survive if Spain fails.
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>It can survive more than one. Perhaps Greece defaulting might be helthier in the long run.

I agree. Just as I believe that allowing the collapse of "too big to fail" firms here in the US would be better in the long run. Didn't happen here and isn't happening in Europe. Short sightedness will lead us all to worse times ahead because the political will is not yet strong enough to do what is necessary.

>>Then you do not believe in the free market. There is no difference between investing in a stock or bond to the downside as well as the upside. Without that you do not have the two sides to a trade. The knee-jerk ban of certain naked shorts is shortsighted, panicky and yet another blow to confidence in the political leadership in time of crisis.
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>Well, there is no free market if neither the banks nor Greece is allowed to fail.

Not exactly, the market for Greek debt, was taking into account the machinations of the Euro-zone. When default looked more likely than bailout, debt buyers demanded higher interest. When the bailout was assured those rates dropped. The market takes all factors into account for it's pricing. Bailout, regardless of the source is reflected in price. Now if we want to talk fair market that's different... ;)

>Also the conditions (overspending and lying about it) are not really faults of the market, but IIRC, "honesty" is one of the corner concepts for a well-working market. Economist insurance is a way of gambling (hedging your dollar against your perception of reality).

I'd argue that information, rather than honesty, is more important. After all, politicians are constantly sticking their greedy, controlling little fingers into the levers of the market and no one would accuse them of acting honestly.

>>If you think of investing as gambling then you should not be investing.
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>Agrred from a personal POV. But "investing" other peoples money to get highest perks/provisions is at least sometimes a different ball game. Also speculating with borrowed money and then hiding it from the balance sheet so lenders are caught barefoot.

There are laws against such things and they need to be enforced. I do not hold out much hope considering the considerable political donations which have been made to both parties here and many more across the pond. There's a reason politicians consider certain entities "too big to fail".

>>With gambling, you know the house odds depending on the strategy you use and the payout tables. There is no such set odds with investing. In addition, with gambling, you are playing against the house and the odds always favor the house. With the stock exchange there is no house to "play" against. One side buys the other sells, hence "exchange".
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>Urrgh... With money the house has the odds with the reality of inflation [and the option of "allowing" more of it] as well as taxing your yearly gains without compensating for lessened buying power. Investing in the stocks is IMHO the same as investing in bonds or giving somebody credit if backed partially by security.

But who is the "house" in this scenario? The government? Exchanges? Dividend paying stocks and bonds have a return built in, gambling (with the exception of specific rare video poker machines) does not.

>>The Euro was a poor concept from the start. Launching a common currency across multiple countries with divergent priorities in regards to investment, public spending, debt and culture was a bad idea, however, it could work if there was consistent central leadership. Since that clearly does not exist, there is no way for the Euro countries to speak as one in regards to their currency. In addition, all member states are subject to divergent political winds within their own governments. The downfall was inevitable without dramatic change to the structure of the common currency countries.
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>Disagree strongly. There was a concept of "punishing" countries having high deficits - germany stopped that because they were already paying a lot into the EU and the red/green government was still overspending. These tariffs should have been kept and other countries better checked. Now the EU central bank is compromized...

Human nature and more importantly, political expediency ensured that establishment of the Euro-zone would never be allowed under ideal conditions. It was an impossible dream to believe that the diversified cultures of the countries could be successfully merged into a single unified financial entity. The disparity of values in regards to work v. leisure from the north to the south could not be resolved. Same is true of the manufacturing v. service and growth v. stagnant economies. To unite such different economies under a single banner requires a strong central bank with authority and the ability to act quickly over the whole zone. Without that, the concept needed to be jettisoned.

>>The Euro-zone has designed it's own downfall and has no one else to blame but themselves. Now the question is, can they pull themselves out? I personally think yes. It will be tough. It will require strong leadership and a huge shift away from the growth-crippling belief in Euro-socialism as a viable long term economic position, but yes, I think that Europe has withstood many hard times in the past and has made the tough choices to push through.
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>Don't underestimate the US debt... as soon as an overspending president will meet 2 finacially heavyweight but similarly stupid EU leaders, the public will be told that inflation saves our goods from the Asians nations having so much of our common debt notes and lessens the burden of the tax payers...

There are 2 obvious calamities to the US in regards to Europe's issues. 1. Our debt is now being sought out at bargain rates. This only encourages the US to produce more debt. Ugh! The other is the falling Euro increases the cost of US goods, thus our exports suffer. When combined with our existing debt issues, a Keynesian administration, additional business crippling regulation and we're in for a lot of pain as well.

>regards
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>thomas