Part 10 athens finance class summer 2010 forum nexus

Brian David Butler Professor of international finance and global entrepreneurship with Forum-Nexus Study Abroad. Guest lecturer with the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan . Previously, Brian taught finance, economics and global trade courses at Thunderbird’s Global MBA program in Miami, and worked as a research analyst with the Columbia Business School in New York City. Brian currently lives in Recife, Brazil where he is teaching classes at the university Faculdade Boa Viagem . A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled extensively in Latin America, Asia, Europe and North America. [email_address] LinkedIn/briandbutler Skype: briandbutler

Brian Butler is a specialist in international economic analysis, and is founder of the prestigious “GloboTrends“ ( www.globotrends.com ) online economics site, which has been featured as syndicated content on Nouriel Roubini’s RGE Monitor, Emerginvest.com, Business Week Exchange, Wikinvest.com, and other leading news outlets. http:// globotrends.pbworks.com / , http:// blog.globotrends.com /

Find my slides: ,[object Object]

Lecture Schedule* * Does not include professional visits, *Subject to change, modification without warning

Team Project ,[object Object],[object Object],[object Object],[object Object],[object Object]

International IQ moment What is happening in Greece? - discussion

Athens Greece Athens Greece – at the heart of a European Crisis? Observations??

Athens Greece ,[object Object],[object Object]

2 main industries ,[object Object],[object Object],[object Object],[object Object],[object Object]

Understanding Greek challenges ,[object Object],[object Object],[object Object],[object Object]

1. Current account deficits ,[object Object],[object Object],[object Object]

2. Budget deficits ,[object Object],[object Object],[object Object]

2. Budget deficits ,[object Object],[object Object]

Budget dilemma ,[object Object],[object Object],Robert J. Samuelson , Monday, May 10, 2010 http://www.washingtonpost.com/wp-dyn/content/article/2010/05/09/AR2010050902443.html?hpid=opinionsbox1

Problem with democracy (need for IMF as “bad guy”) ,[object Object],[object Object],[object Object]

Fears- Contagion ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Other countries – BIGGER Debts http://www.economist.com/world/europe/displayStory.cfm?story_id=16003661&source=most_commented

Greece to global ,[object Object],[object Object],http://preview.bloomberg.com/news/2010-05-07/eu-leaders-under-pressure-to-broaden-response-to-greek-crisis-as-g-7-meets.html

European banks ,[object Object],[object Object],http://www.economist.com/displaystory.cfm?story_id=16216443

Rush to “safety” ,[object Object],http://preview.bloomberg.com/news/2010-05-09/bank-funding-crunch-deepens-as-default-swaps-reach-records-credit-markets.html

Don’t blame the Euro (for the Greek mess) ,[object Object],[object Object],Robert J. Samuelson , Monday, May 10, 2010 http://www.washingtonpost.com/wp-dyn/content/article/2010/05/09/AR2010050902443.html?hpid=opinionsbox1

Greek short term debt trouble ,[object Object],http://thegovmonitor.com/world_news/united_states/greece-italy-and-europes-sovereign-debt-crisis-28846.html

Demographics ,[object Object],Robert J. Samuelson , Monday, May 10, 2010 http://www.washingtonpost.com/wp-dyn/content/article/2010/05/09/AR2010050902443.html?hpid=opinionsbox1

Review USA – unique position

discuss “How related?” ,[object Object],[object Object],[object Object],[object Object]

What do these have in common?... Greece rolling over its debts EU banks borrowing from ECB Lehman Bros failure Investment Banking business model

Credit Crunch = Result Assumes that short term markets will continue being LIQUID (will keep spinning, full of flowing cash) But, what happens if short term markets freeze up? This is what happened after Lehman Bros. failed (and almost happened again with Greece)…

Greece, Germany, EU + IMF ,[object Object]

Legacy of the Crises – part 1 ,[object Object],[object Object],[object Object],Martin Wolf book, “Fixing Global Finance”

What is unique about the USA? ,[object Object],[object Object]

Devalue currency ,[object Object],[object Object],Martin Wolf book, “Fixing Global Finance”

[object Object],[object Object],[object Object]

If devaluation of the US dollar… ,[object Object],Martin Wolf book, “Fixing Global Finance”

The US Balance Sheet: (just looking at external financing) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],So, what happens if US dollar “depreciates”? (does US become more, or less “Solvent”?)

Solvency v Liquidity ,[object Object],[object Object],[object Object],[object Object],So, what happens if US dollar “depreciates”? (does US become more, or less “Solvent”?)

If devaluation of the US dollar… ,[object Object],[object Object],Martin Wolf book, “Fixing Global Finance”

US Balance Sheet: with Depreciation of US currency ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],If US dollar DEPRECIATES… US becomes MORE solvent!

Exorbitant privilege ,[object Object],[object Object]

Real threat to the USA ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why US needs this privilege (low rates, in own currency) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Demographics & the Debt By 2050; a third of the rich world’s population will be over 60 “ The demographic bill is likely to be (10x) ten times bigger than the fiscal cost of the financial crisis.” The Economist, June 2009

2000-2007 “STABILITY” ,[object Object],[object Object]

Class discussion: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Class discussion: ,[object Object],[object Object],[object Object],[object Object]

Part 10 athens finance class summer 2010 forum nexus

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Part 10 athens finance class summer 2010 forum nexus