Comment Re:Great Recession part II? (Score 4, Insightful) 743
I am nervous as this feels like early 2008 all over again.
It's not. That was the end of 2011, when Greece nearly defaulted and got a bailout. Too many banks in Europe had Greek bonds, and they were worried about that contagion.
Since that time, all the other banks have divested themselves of Greek bonds (and have been recapitalized by the ECB). There is no worry of contagion this time, because no one expected Greece to repay anything, and they prepared appropriately. The European governments are laughing as Greece falls over the edge.
So what will Greece do? The first thing Greece will do is refuse to make interest payments (not on everything at first.....EFSF loans don't need to start being paid back until 2023, for example). That will give them a bit more money, but the major problem is not having enough money to pay their bills. Mandatory furloughs of government workers, riots, etc. Will they leave the Euro? Who knows, but that won't help the fundamental problem that the government spends more than it takes in (and now it can't borrow anymore).
If you want to watch for a time to worry, the time will be when Germany, or France, or the United States can no longer borrow. Then there will be another 2008.