« Michael Covel on Trend Following | Main | Should You List Your Hobbies on a Resume? Yes, With Caution »

02/14/2011

Book Review: Bust—Greece, the Euro, and the Sovereign Debt Crisis


Click to Print This Page

BustIn his new book, Bust: Greece, the Euro, and the Sovereign Debt Crisis, Matthew Lynn provides a thorough and fast-paced account of Greece’s role in the decline of the euro and the impact felt by the rest of Europe. Lynn, a financial commentator and writer for Bloomberg Television, Bloomberg News, MoneyWeek, and Spectator, is well equipped for the task.

The reader will find it astonishing that Greece was ever admitted into the euro and lent money. Rife with economic dysfunction, governmental incompetence, and corruption, Greece has been “stuck in the past, and largely unable to compete in the modern world.” The annual household budget for bribes to get anything done is estimated at 1,500 euro. Lenders were well aware of Greece’s situation.

The Euro became a vehicle through which Germany financed a huge property bubble, most notably in Ireland and Spain. At the peak of the Spanish real estate boom, one-half of all the cement in Europe was used in Spain, while the real Spanish economy was barely growing. Aggressive cross-border lending has put the European banking system at risk: France, Germany and the UK had a combined exposure to Spain, Greece, Portugal, and Ireland amounting to $1.2 trillion in 2010. Some of the borrowing countries are viewed as a “debt-deflation death spiral.”

As Lynn shows, Germany and France came to grips with the problems of the debtor nations very late, almost at the last minute. The prospect of a truly unified European economic structure is uncertain, as is the future of the euro. Read Bust for a realistic picture of Europe’s financial challenges, and stay tuned.

–Bill Hayes

Related Posts Plugin for WordPress, Blogger...

Comments

The comments to this entry are closed.

UConn-ad

NYSSA Job Center Search Results

To sign up for the jobs feed, click here.


UPCOMING EVENT
MF16

NYSSA Market Forecast™: Investing In Turbulent Times
January 7, 2016

Join NYSSA to enjoy free member events and other benefits. You don't need to be a CFA charterholder to join!


CFA® EXAM PREP

CFA® Level I 4-Day Boot Camp
Midtown

Thursday November 12, 2015
Instructor: O. Nathan Ronen, CFA

CFA® Level II Weekly Review - Session A Monday
Midtown

Monday January 11, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level III Weekly Review - Session A Wednesday
Midtown

Wednesday January 13, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level III Weekly Review - Session B Thursday
Thursday January 21, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level II Weekly Review - Session B Tuesday
Thursday January 26, 2016
Instructor: O. Nathan Ronen, CFA