What happens when Greece defaults

[TimYoung]

How best to profit from the situation?

Whenever Government fights the market, I think there would be a good opportunity to profit big. Like how Soros made a ton of money from ERM.

Or basically how to bet against the ECB?

 

[shewolf]

Tell the creditors to get stuffed. Don't give them a penny. They deserve to lose the lot for lending to a country in such dire straights. If you are that dumb, you deserve to get burned.

If they can't borrow in the future, great! That is the BEST thing for any country. To be forced to live within your means is nothing but positive.

Exactly

 

[shewolf]

The problem is that right now, whenever financial institutions get their bets wrong, they are too big to fail and the government bail them out with public money. If governments always bail out losers, then these overtly risk loving behaviours will never be punished and will just keep getting worse. Who would not bet everything they have if they know they can't lose?

I am not convinced the argument that if capitalists were allowed to take their loses then the economy will go into the dark ages. And this idea that loses from the banks are somehow more important than loses from the tax payers. Think it is just scare stories to get the tax payers to cough up.

Too right

 

[Martinghoul]

Lehman happens...

 

[Michael8667]

Anyone lending to Greece now is just a fat cat who's perhaps getting too greedy.

 

[Atilla]

Anyone lending to Greece now is just a fat cat who's perhaps getting too greedy.

Germans?

 

[Mr. Charts]

Higher interest rates for credit reflect higher risk, it's nothing to do with greed.
Ultimately, and recent electoral factors in Europe make this more likely for a variety of reasons, imho, a departure from the Euro of Greece and another couple of countries would offer the best of a poor series of options.
Although Greece has consistently lied about its economy, the seeds of the Euro restructuring were sown in the original concept of one currency for many diverse economies.
Richard

 

[TheBramble]

If the majority of “X” are offering 0.5% to 1.5% and you have one offering 18% then that certainly does reflect increased risk associated with lending. Totally agree.

But where greed comes into it is with those who jump on board for inflated rates of return and do NOT adjust their expectation of risk accordingly.

So when their return does not materialise, they expect to be compensated for the shortfall between their expectations and the reality.

Not that it matters either way of course.