The news is filled with concerns about Greece’s sovereign debt. It’s an investment concern and an economic concern. Some people are touting it as the beginning of another 2008 period.
But, what’s happening now is not the same thing as 2008. The crisis then was worldwide. It was based on banks holding massive amounts of toxic assets. Greece’s debt is very small compared to the amount of debt extended in 2008. They have already defaulted on 60 percent of their debt. If they were to default on the other 40 percent, the banks would be able to also cover it.
The big question is contagion. If Greece defaults will Italy, Spain, and Ireland also default?
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