Posted on | June 25, 2011 | 30 Comments
The Standard & Poor 500 this week suffered its seventh week of losses in the past eight weeks, and the Dow Jones Industrial Average again closed below 12,000 on Friday. The problem? In a word, Europe:
“Everybody is trying to digest how the European debt situation is going to shake out,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages about $20 billion. “They’re playing an expensive game of chicken with Greece because the downside of not passing a bailout for that country is effectively a financial system meltdown.” . . .
The outlook in Greece? Not so good:
A knife-edge vote in the Greek parliament on a new package of [spending] cuts is expected on Wednesday, with [socialist prime minister George] Papandreou desperately needing to convince his reluctant backbench MPs to approve the measures.
If Greece refuses to accept more austerity measures, the consequences for Greece, the EU and indeed the global economy could be dire.
“The problem with socialism is that you eventually run out of other people’s money,” Margaret Thatcher once observed, and for Greece, “eventually” is now.