This is a great article that describes what’s happening to Greece right now and how it is infecting the markets. It compares the Greek debt crisis to that of the US housing debt crisis that spurred the major crash in the global markets in 2008.
We all know the story of US subprime by now.
Lord knows it’s been trotted out enough. Bundles of home loans, dodgy borrowers, dodgy lenders, cunning investment bankers, amoral ratings agencies – it was a sorry tale of greed, stupidity, and smoke and mirrors.
But it all boils down to this. Investors thought they were buying one thing (an AAA-rated security), when in fact they were buying quite another (a bundle of debts that could never be repaid in a million years).
It wasn’t until they finally realised what they’d done, that all hell broke loose.
– John Stepek, MoneyWeek
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