Greece Is the Word

 | Jan 17, 2012 | 9:00 AM EST  | Comments
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The eurozone is the Golden Globes to Wall Street's Academy Awards. It is something to watch and definitely can have a box-office effect, but it is mainly focused on for how it influences the main event.

And for the eurozone and the Golden Globes, handicappers shouldn't be distracted by the pre-show glitz at the expense of the actual substance.

Looking at all the Golden Globes commercials you would think there was nothing important except the red-carpet fashion and Ricky Gervais' guaranteed-to-be iconoclastic and edgy jokes (such as insinuating that Madonna may not be the most virtuous of people -- earth shattering). But the real impact is how the awards are marketed for an Oscar run. Suddenly I'm seeing ads for "The Artist" everywhere.

Over the long weekend, the Europe attention has been on the EFSF and eurozone downgrades. But that's the pre-show glitz. The real impact will come from the negotiations in Greece.

Greece is the closest it's been through this whole debt debacle to throwing in the towel and defaulting. It has negotiations coming up with creditors, which don't look promising, and it is yet to push through many of its promised austerity measures and can't get the political backing to do so.

Fitch is basically calling time on the whole thing and saying Greece will default.

Two years ago at Davos, the message that economists told me was that Greece is bankrupt. For two years the EU has been trying to figure a way for that not to result in default. But who cares if the EFSF is downgraded if it can't stop Greece from defaulting? That's its whole reason for its existence.

This doesn't signal a euro breakup, as Italy seems to be managing to push through its austerity measures. But a whole new plan of action may be needed for orderly euro exit, pushing this daily debt debate out another year or two.

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