eece's latest downgrade gets a ton of push, however it reminds me of all publicity which was built when GM/GMAC went under investment-grade - You ain't seen nothing'yet, was my reaction then and now.

Like GM, Greece is really a storied, also fabled entity to which we owe western democracy. I used to call GM the country of GM because it had been so Byzantine - 35 levels of management at its bloated top!

But in the same way GM for many years had no longer lived around its celebrated misquotation What's advantageous to Normal Motors is wonderful for the country, Greece is no longer a bellwether or a country of good significance - it's more of a image of chicanery, greed, and featherbedding, significantly as GM was when it drawn its dubious unfunded-pension-liability sales control, issuing debt and claiming that it was now funded, that actually significantly improved GM's reported earnings, even though nothing had really changed! Greece gets a lot of interest for cooking its publications to get across the debt constraints of EU countries. Nonetheless, it is really a small country.

Leading people to Spain, a medium-sized country. Spain has thirty per dime unemployment, and if they had a "U6" bigger examining as we do here, it could possibly be significantly higher. Spain had a building increase, much like Ireland's, which includes busted. Unlike tiny Ireland, Spain has millions of unemployed guys with no other skill except construction. In the old days of boom-and-bust in Europe, they'd have escaped to America, whilst the Italians and Irish did in the late nineteenth and early twentieth centuries. No more possible.

Spain's millions of unemployed individuals who can have actual difficulties getting different types of employment really are a new image - a far more intractable fact as well - of Europe perpetually on the verge of downturn, due to fiscal austerity coupled with large unemployment. In the U.S. we're only just beginning the conversation about cfa level 1 summary notes beginning to shut the floodgates of government support for a delicate, but rising economy. With unemployment only half Spain's, our large unemployment however shows a huge disincentive for the government to "prematurely" start reducing fiscal stimulus.

Spain, like Greece and to an inferior level Italy, will have to accept more fiscal restraint even as it will, by financial principle, be raising fiscal stimulus. That is because it has to remain in the EU, unless the EU disintegrates, unlikely in the near-term, in my opinion.

Spain's capture resembles that of Colorado and Illinois, in a superficial aspect, because U.S. states can't apply for bankruptcy and therefore need to reduce solutions in the same way the problem might call for more state-sponsored employment, maybe not less. The huge benefit Colorado and Illinois have over Spain is they are fully incorporated into the United Claims (our Civil War determined that for once and for all), and there's a huge federal approach which can be being footed by all U.S. people with small fanfare - federal assistance, equally direct and indirect, to the states. Our National Recovery and Reinvestment Act can be a incomplete bailout to states and municipalities in thinly-veiled disguise.

Money that Colorado could by legislation have to pay on schools and other mandated paying can now be useful for debt company, considering that the Federal government has absorbed the obligation, at the least partially, liberating Colorado from imminent default. The Construct America ties displayed still another subsidy because the Federal government pays 35% of the fascination on a state or regional obligation. Those are just a couple of reasoned explanations why Colorado and Illinois credit standard swaps (CDS) business about 285 base point, although Greece is at a massive 809 base points. No one in the U.S. administration is seriously contemplating making Colorado "move" and standard and have its own (devalued) currency to move using its possess sovereign government, as Greece nominally has.

In summary, the situation with the extremely indebted, high-unemployment, economically-constrained places of southern Europe is that they will behave as a huge drain on the EU's assets for several years to come. One can't merely have the Spanish personnel move to Indonesia to study in the health-care segment, or even to construct German houses. As we have seen for Michigan and Kansas, it's difficult enough to go redundant personnel from states in the U.S. into states with greater financial opportunity, and we share a common language and nearly identical cultures.

Europe's issues move way beyond the decorative chicanery of Greek government, just whilst the vehicle and vehicle areas market (the vehicle areas market applied more than three times as many people whilst the vehicle industry) have endemic issues way greater than these of GM and Chrysler. As we have seen from the huge decades-long fall of our vehicle and auto-parts industries, these issues do not go away in a hurry.