Thursday, January 28, 2010

Recent Hellenic Developments

Wow, it's been less than a day since my inaugural Forbes column got posted, but it is already way outdated. So I just wanted to summarize the latest developments and let you know what I think:

First, after Monday's successful auction, the Greek debt crisis returned with a vengeance, to quote the Financial Times. Yields jumped after the country denied reports that it had mandated Goldman Sachs to sell debt to China. Now, there is serious talk of a bailout, which the Germans continue to deny strongly. For example, a story in today's Le Monde that the core countries are working on a bailout was denied right away by the German Foreign Ministry. The Germans actually have a point: A bailout would be like inviting moral hazard in unless it was accompanied by an IMF-style austerity program and the accompanying control over the country's fiscal books, which is a distinct possibility. Sure, Washington can go ahead and save the Gubernator, but the key difference there is political union! By the way, I forgot to mention one key point on costs of a Greek default in my column yesterday: About 1/4th of Greek debt is owned by European banks, mostly in Germany. This footprint makes today's news very interesting:) But maybe, it wasn't logical to expect Greeks (or the other PIGS for that matter) to behave like German's as FT's Lex argues today. So it is a matter of spoil the Greeks now or save your banks later for the Germans. Tough choice...

This is all a bit too depressing for a Thursday afternoon, so moving a bit to the lighter side of things, I'll present the top 3 reader comments to my column in the David Letterman style:

3. "Carsi Forbes'a karsi"- this literally means "The Bazaar is against Forbes", but to understand this, you'd have to know a bit about Turkish soccer- or have a look here. [ED: 5/5 for originality, 2/5 for accuracy- actually, I should be against Fortune and Today's Zaman, which are competitors of Forbes or Hurriyet Daily News & Economic Review.

2. This is all good for Turkey- if Greece goes bankrupt, we (Turkey) can buy all those Aegean islands for peanuts from them. [ED: 5/5 for originality, 1/5 for political correctness]

1. The number one spot goes toooooo: subject: forbes'un tirajini 96% artiran turk!
Genc ekonomist emre, forbes'un olaganustu yetenek of 2010 listesine giren iilk turk oldu! Amcasina benzettigi bernanke ile yakin dostluk kuran bu mukemmel insan, (kendisine uncle bernanke der zaten) forbes'ta yazdigi "faiz gulu" isimli yaziyla 65dile cevrilmis bir makaleye imza atan ve forbes'u bestseller yapan ilk turk oldu. [ED: There is no way I can translate this, but when I read it, I almost laughed to death... Even among the Turkish-speakers, there are only a handful of my readers who will get this in its entirety, but if you speak Turkish and want to learn what this is about- jot me an email and I'll send you 3 links in Turkish, which will enlighten this note].

There are also quite a few "serious" comments, to which I will answer either here or in Forbes. But I have to do my jog first...

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