The Greek Mess

An American tends to have a wide array of sources to view the Greek mess, and how the Germans fit into it. Because of the far extremes of what is printed on a daily basis......you have to be kind of careful and find a middle ground.

What you should know....most Germans (a majority).....don't have a vast amount of patience for the Greeks knocking at the European door for more money.  If you had a up and down vote by the public....I doubt that the Greeks would get a penny of loan support.  The issue though.....is that German experts know the consequences of such behavior.

What the EU guys now want....is this signed signature by all the chiefs of Greek political parties (that matter). The Germans are demanding this signature on a piece of paper that says things are going to change in a rapid fashion.  The Greek political folks have never been known for strong behavior changes.....so this signature is a harsh thing to accept.

Scenario one is where they accept the demand, sign, and get the loan.  The odds are that they burn through that loan in less than twelve months, and reappear by December to hint of another loan requirement.  It would buy time for the Greeks....and little else.  Scenario two would eventually kick in anyway.

Scenario two is where one or two political parties say "no" and refuse to sign the promise.  The EU drops the loan deal, and opens the door for Greece to leave the EU.  In a short amount of time, Greece has to bring back the Drachma and admit financial failure over the whole country.  If you had $1000 a month in pension payments before.....you'd likely find the new amount to be less than $400 (my humble numbers).  For a short period of time, it's be harsh life for regular Greeks to survive.  For Americans?  Well....the Euro would tumble and Europeans would buy less American products.  So we'd create a new recession period (small in nature) that would last at least twelve months.

So when you read the Greek update each day and wonder about what it really means in simple words.....it will drag down some US markets for a while, and we might all understand why the Germans were so strict about the loan guarantee business.

And if you took the Greek model and compared it to California.....you might start to see some comparisons, which is a sad thing.