Market Review and Trends
Greek Debt Crisis – Europe’s "Lehman Brothers" Moment
By Dividend Warrior  •  June 20, 2011
A Greek default will set off a chain of events similar to the post-Lehman Brothers collapse in 2008. Almost every country will feel the effects.
A very possible/scary scenario goes like this:
Several major European banks are big holders of Greek debt. If Greece defaults, these banks will suffer huge amounts of write-downs. Recently, major French banks were considered for a ratings downgrade. Germany and France are the 2 biggest holders of Greek debt.
Banks will be reluctant/scared to lend to one another.
There will be a global credit crunch, a repeat of the post Lehman Brothers collapse in 2008.
Ireland and Portugal will just default too. Their governments will be thinking, "Since Greece is allowed to default, why should we suffer all the painful austerity measures?" The defaults of Ireland and Portugal will spread the debt contagion to Spain and Italy. Spain holds a relatively large amount ...
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By Dividend Warrior
A mid-30s dividend growth investor living in Singapore. I am a simple man with simple needs.
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