El-Erian: Greek bailout will cause global risk aversion

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Greece has officially asked for the EU, IMF rescue package to be activated. The Greek debt bailout is similar to the subprime crisis in the US and likely will send global investors looking for safety, Pimco’s Mohamed El-Erian told CNBC.

While Greece’s request to the International Monetary Fund that the bailout plan be activated helped calm world markets for the moment, El-Erian, CEO of the world’s largest bond fund, said the true ramifications have yet to be felt.

“How long will it take markets to worry more about contagion risk?” he asked during an interview hours after an upward revision of Greek’s deficit and a credit downgrade sent shockwaves through the European Union.

Source: CNBC, April 23, 2010.

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3 comments to El-Erian: Greek bailout will cause global risk aversion

  • [...] El-Erian: Greek bailout will cause global risk aversion (investmentpostcards.com) [...]

  • This restructuring which would require “sacrifices” to be made by the Greek people and not by the financial institutions . I wonder if Germany,France and other EU members really bailed out Greece or they bailed out their own financial sectors which had a significant Greek exposure. Guess who will be the main winners/losers of this bailout script. As usual Winners – Financial Institutions , Losers – Common people . Note there is a separate package to rescue Greek banks as well but not much of a package for the Greek people for whose ostensible benefit this package is designed to be.

  • Jiff Davis

    Q Why did the USA allow foriegn banks to use the FED’s discount window
    A To prop the european banks up so new CDS could be made with a low premium
    Q Why do that
    A So US banks could place $200bn in short bets against a europen bank only worth $1bn
    Q Do they not need to own the european bank to do that.
    A No
    Q Can you prove this
    A Ask Mr Strauss-Kahn if the americans ever let him go
    Q Could this be seen as an act of war
    A The people in Greece would say so
    Q Who’s next
    A Ireland but it should be the zionist bankers
    Q What should i do
    A Get out of bonds before we see debt forgivness across the board on goverment bonds.
    Q What else can i do.
    A Buy silver/gold and store water and food.

    Just like the $2.3tr that went missing the day before 9/11 and buildings fell over, gold went missing and the short bets on airlines the FED will tell us that none of this money is traceable.

    You have been warned !

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