Monday, April 20, 2015

GrApocalypse now

Mohamed El-Erian, international celebrity economist, says, Greece, Not looking good.;
...a ghastly set of circumstances is coming together to form an inevitable reality – that of Greece being ejected from the euro zone (a forced “Grexit”), which wouldn't be caused by a conscious decisions, but would be the result of a huge accident (“Graccident").
Dogma, morality and blind spots are playing a much greater role, obscuring economic and financial realities.
Tell us something we didn't know, Mohamed.

Chances are...awfully bad;
Putting all this together leads me to postulate today a 45/10/45 probability distribution: There is a 45 percent chance that a last minute messy compromise allows the muddling-through to continue; a 10 percent chance that a meaningful policy breakthrough will be achieved, and a 45 percent chance that the outcome is a Graccident in which both the Greek government and its European partners lose control of the situation. Under this third scenario, a series of Greek payment defaults, bank runs and the imposition of capital controls would force Greece out of the single currency.
Even the worst among us can be a good bad example.

1 comment:

  1. It would be a crime against humanity and an immoral experiment to take a small country and impose pure socialist policy just to see if it would collapse in spectacular fashion.

    The Greeks have decided to aid economic theory by doing this to themselves. All of academia is keenly interested. Greece should be praised for its contribution to science.