A lot of massaging of the index. Greece has been the EU’s charlatan, and one thing we all know about charlatans. Is that when they’re caught, it’s not pretty. This is going to be a rough time for Greece.
The crisis in Greece is getting worse. Its people on July 5 voted against the terms of the most recent bailout deal in a referendum, rejecting austerity. If a new deal isn’t reached soon, its government won’t be able to pay its debts and will run out of euros, which many expect it will mean exiting the euro zone. This 2010 Michael Lewis classic for Vanity Fair, “Beware of Greeks Bearing Bonds,” helps explain the current situation:
For most of the 1980s and 1990s, Greek interest rates had run a full 10 percent higher than German ones, as Greeks were regarded as far less likely to repay a loan. There was no consumer credit in Greece: Greeks didn’t have credit cards. Greeks didn’t usually have mortgage loans either. Of course, Greece wanted to be treated, by the financial markets, like a properly functioning Northern European country. In…
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