The Greek pain will be on view for the rest of the week as the Parliament gears up for a vote on the more austere measures wanted by Germany and the Trioka.
As Nobel Prize winning economist Joseph Stiglitz said Monday: “We are not bailing out Greece, we are bailing out the banks that lent money to Greece.”
At some point the Greeks will come to the conclusion that they will not bear the brunt of this load for decades.
If not for the Greek drama, China would or should be center stage on the slowing global economy.
China’ slowing manufacturing sector along with stock market pullback over margin requirements, tempered by restrictions to sell stock on the Shanghai exchange by its biggest players should have more US investors concerned than Grexit.
Unfortunately no one can predict what will happen there, due to government controls and interventions.
Yes stocks should fall and the yuan should get cheaper, but neither of those positions will be allowed to happen now. Managed economies the world over have taken market predictions out of the equation, unless it’s too small for the central banks to care.
So we will see rioting in the streets of Athens this week, and probably a fall of the Greek government in Europe sometime next week. We will see China further bolster its stock market with direct buys of stocks, while not allowing selling or shorting and everyone will say that all is well.
Jesus, September/October is going to be scary this year.