On Saturday night the New York Times posted an interesting piece on Goldman Sachs' connection to the unfolding Greek tragedy.
For those who have missed it, for the past week or two capital markets have been fretting over what they cheekily call "the PIIGS"—Portugal, Italy, Ireland, Greece, and Spain. The operative concern is too much debt. The theory is that these smaller countries will require bailouts on the AIG scale, which will pull down the more important (to bankers) countries of Europe, since they all share the same currency.
So Greece is up first, with a foreign debt load now exceeding 1.25 times its GDP. (The U.S., even with the current pile-on, is only at about even with annual GDP.) A bankrupt nation means crisis for not only its own people, but—and here we should be careful—for all the folks who lent money to it. The problem, again, seems to be derivatives. The Times reports: