Greek Default 2015 Poll

[GFG]

Yea Greece is actually more trade and tourism related. Guess what happens to these 2 when the economy goes into chaos

That said I've never seen or read a sovereign country "die" due to debt, not even Germany. Iceland came close.

A default doesn't necessarily mean chaos, Iceland did fine after they defaulted, tourist numbers nearly doubled after the crisis.

Contrary to what most people think, Greece actually has a very competitive services sector, the trade surplus on services exports account for over 10% of Greece's GDP, thats massive by any measure.

Greece should have defaulted 4 years ago, like Iceland, they would be doing fine now.

Oh it was chaos alright, for a few yrs after they defaulted.
Iceland underwent a severe economic depression between 2008-2010. 3 yrs of suffering, during which market cap of the Icelandic stock exchange fell by >90%. (!!!)
GDP dropped by 10%
Of course now they're on the mend and doing well.
that's the effect of default, u start afresh. But you've to go through some years of hell first.
Greece would go through arguably even darker days, and for a longer period too, because
1) Iceland wasn't part of and didn't get kicked out of Eurozone. Greece will be kicked out and the other finance ministers would almost be happy to do so!
2) Greece has to revert to the drachma. Icelandic kroon dropped severely too, but its different from having to abandon another currency and start printing yours again
3) Iceland had loans from the IMF after their default, to help them stabilise and support the value of the krono.
Greece.... nobody's going to support any drachma.

Sure, they'll be ok after several years.
But before that......
and the Greeks know it too. That's why they simply do not want to leave or get kicked out.
They just want their cake and eat it too. Oh, and they also want the German's cake and eat that too.

Only 3 years of suffering and a 10% drop in GDP? How is that even comparable to Greece's 25% cut in GDP and 7 years of suffering under the EMU? I think most Greeks would gladly take the former if they knew staying with the euro was going to do this to them, its obviously too late to regret it now.

7 painful years, all for naught.

Greece is currently experiencing a massive brain drain, the best and brightest are abandoning the country (mostly for Germany) because they see no future in the country, the same thing is also happening to Spain. This is what years of austerity has inflicted on the peripheral economies.

Oh for sure, nobody's doubting that the Greeks have suffered. The point I m making, which is prob an obvious point, is that after default, this 25% drop in gdp would look like its nothing. Things will get ugly, and for a number of years.
http://www.tradingeconomics.com/iceland/stock-market
This shows a chart of Iceland stock index. Crisis in 2008, if u look at the big picture, they still aren't even close to really recovering.
But of course, if u zoom into 2012-present, it looks much better.
Greece defaultingwill have to go through that same periodic wilderness, followed by a long slow recovery

On another note, austerity alone didn't CAUSE the Greeks to suffer.
IMO, there needs to be austerity AND business friendly policies. Sure, austerity was imposed. But the 2nd part of the equation was missing. The Greeks lack strong leadership who would do what's necessary. Things like labour law reforms, privatization of government controlled companies and lowering (with the aim of eventually scraping) generous pensions, retirement benefits etc

Or to view it from another angle: what's Singapore stance on all of these compared to Greece? It's totally opposite. And for good reasons too.

Back to the topic of this thread... My opinion is still that they won't default by the end of June though, and my investments are set up as such. If one genuinely has a strong conviction that Greece will default, then it's better to exit everything n hold cash cos it's hard to see how the subsequent contagion won't affect every market.