Greece defaults on its debts

http://www.wsj.com/articles/some-greek-banks-to-open-for-pensioners-1435653433

I've read in other articles on the matter that the Greek default could have potentially devastating economic and geopolitical effects. What do you make of this situation?

 

[Dudeofteenage]

greece is not a service economy though:

According to the CIA world factbook 80.6% of the Greek economy is based off services.

 

[Vitriol]

According to the CIA world factbook 80.6% of the Greek economy is based off services.

but that includes the public sector and maritime sector which count as 40% and 15% of the economy together. the cia entry also hasn't been updated since 2013. Since then there have been deep cuts to public sector and considerable shrinkage of the economy.

 

[Dudeofteenage]

but that includes the public sector and maritime sector which count as 40% and 15% of the economy together. the cia entry also hasn't been updated since 2013. Since then there have been deep cuts to public sector and considerable shrinkage of the economy.

Why shouldn't the public and maritime sectors be counted as part of the service sector, though?

 

[Holdek]

greece is not a service economy though: their main industries are exporting olives, cotton, figs,rice and nuts.

Agriculture is like 3% of their GDP. With Argentina it's a much larger share, not to mention what they had in terms of mining right before a worldwide commodities boom.

 

[Vitriol]

Why shouldn't the public and maritime sectors be counted as part of the service sector, though?

because when looking at how Greece can best proceed its pointless treating them as a service economy when the vast majority of their services are either a) state funded and going to disappear or b) maritime and dependant on their geographic position and port facilities neither of which change regardless of which route the Greeks pick.

tourism also makes up a decent slice of the services pie and its something that would also likely benefit from a devalued drachma.

Agriculture is like 3% of their GDP.

yes its pitiful, i think their industries count for around 16-19% but yeah Greece is fucked.

 

[Dudeofteenage]

yes its pitiful, i think their industries count for around 16-19% but yeah Greece is fucked.

How is that pitiful? 3% is actually pretty high by European standards - the UK's economy is only 0.6% agricultural, and Germany's 0.9%. Having a proportionally small agricultural sector is usually the mark of an underdeveloped economy.

As for the whole service thing, the whole point of devaluing the Drachma is to prop up the public service sector of the economy.

 

[Zero]

Man, That's a pretty strong accusation. Any evidence to back it up?

11% difference with 3% margin 19 time out of 20 is HUGE. That's 8 standard deviation. 7 sigma, the max of the table I'm looking at, mean a probability of 1 on 390 billions of being at least that off. That's why I mean it's obvious.

Edit: there are 2 other plausible possibility: the Greek government rigged the referendum and the polls are legit or all polls stations used interns with no experience to conduct the polls.

 

[Vitriol]

How is that pitiful? 3% is actually pretty high by European standards - the UK's economy is only 0.6% agricultural, and Germany's 0.9%. Having a proportionally small agricultural sector is usually the mark of an underdeveloped economy.

As for the whole service thing, the whole point of devaluing the Drachma is to prop up the public service sector of the economy.

i think its pitiful because in a country with few natural resources its one of the few commodities that can provide a steady base to rebuild an economy. The UK and Germany both have far larger natural resources than Greece,

if they use the drachma to fuel the public sector they risk getting caught in an inflation loop.

 

[JU 199]

11% difference with 3% margin 19 time out of 20 is HUGE. That's 8 standard deviation. 7 sigma, the max of the table I'm looking at, mean a probability of 1 on 390 billions of being at least that off. That's why I mean it's obvious.

I think you may be stretching a little. A few groups did predict this outcome as possible. It was just highly unlikely.

The Economists intelligence unit predicted 60% for example-
There was some internal poling from Europe that reiterated that prediction. (i'll post the link when I find the source again)

 

[Zero]

I think you may be stretching a little. A few groups did predict this outcome as possible. It was just highly unlikely.

The Economists intelligence unit predicted 60% for example-
[MEDIA=twitter]617704139951341569[/MEDIA]There was some internal poling from Europe that reiterated that prediction. (i'll post the link when I find the source again)

Well that confirms that the Greek government didn't rig the referendum.
We are left with most polling stations having rigged their polls.


In the US polls get the result right within 1-2% most of the time, and they are never off more than 5.

 

[JU 199]

We are left with most polling stations having rigged their polls.

Isn't that of a lower probability than the vote being unlikely but legitimate?

 

[Zero]

Isn't that of a lower probability than the vote being unlikely but legitimate?

Absolutly not. As I've stated. 7 standard deviation off the prediction happens less than once every 390 billions referendum. The earth have more probability of exploding in the next minute than the vote being unlikely.

 

[Le Bateleur]

Absolutly not. As I've stated. 7 standard deviation off the prediction happens less than once every 390 billions referendum. The earth have more probability of exploding in the next minute than the vote being unlikely.

No. You're being far too prescriptive. In a process where all the variables are known and controlled, a seven-sigma event is vanishingly rare. But poll samples being unrepresentative happens all the time...

 

[JU 199]

Absolutly not. As I've stated. 7 standard deviation off the prediction happens less than once every 390 billions referendum. The earth have more probability of exploding in the next minute than the vote being unlikely.

I'd be more inclined to agree with you if there was news that rigging happened. How many polling stations would have to bork the vote? Surely we would have reports of contamination by now. It's more likely that it's unexpected but legitimate.

Meanwhile...

Greece's banking system is close to collapse unless the ECB floods the country with liquidity in the next 68 hours.

ADF probably has more assets than Greece will have in a few days.

 

[AnOminous]

No. You're being far too prescriptive. In a process where all the variables are known and controlled, a seven-sigma event is vanishingly rare. But poll samples being unrepresentative happens all the time...

I'd be amazed if both sides weren't cheating.

 

[XYZpdq]

Media voter polling is mostly a joke. I wouldn't take a poll to mean anything beyond "Group XX paid for this poll".

 

[DuskEngine]

In the US polls get the result right within 1-2% most of the time, and they are never off more than 5.

There seems to be a crisis in polling in general, and a lot of major ones have proved unreliable recently - remember the UK general election predictions?

 

[Holdek]

11% difference with 3% margin 19 time out of 20 is HUGE. That's 8 standard deviation. 7 sigma, the max of the table I'm looking at, mean a probability of 1 on 390 billions of being at least that off. That's why I mean it's obvious.

Edit: there are 2 other plausible possibility: the Greek government rigged the referendum and the polls are legit or all polls stations used interns with no experience to conduct the polls.

Are you concerned because of a difference between the polling and the voting results? Look at the US elections of last year and the Israel and UK elections of this year. The polling industry is in a crises.

 

[Dudeofteenage]

i think its pitiful because in a country with few natural resources its one of the few commodities that can provide a steady base to rebuild an economy. The UK and Germany both have far larger natural resources than Greece

I think you're overestimating how important natural resources are in a modern economy. There are many countries with few natural resources and a small agricultural sector which are nonetheless extremely prosperous. (Also, is Greece that poor in natural resources?)

 

[DuskEngine]

Yanis Varoufakis just resigned. Now who will engineer Greece's microtransaction-based recovery?