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The U.S. is too big to fail, right?
No one knows who will be hurt if Greece defaults

If Greece defaults, who will be holding the bag?On Wednesday, Fed Chairman Ben Bernanke assured us that the effects of a Greek default on U.S. banks would be very small. But in our interconnected world, we have seen many surprises, and they have not been pleasant. Surely, the European banks who directly own Greek (and PIIGS) debt would be most affected. But who else does, and to what extent, is unclear. Recent publications have pointed, as one example, to the exposure of big U.S. money market funds that hold large amounts of short-term European bank debt.

The biggest way that the risk of default is mitigated is through credit default swaps, in a largely unregulated, over-the-counter (as opposed to exchange traded) marketplace where investors buy and sell protection against default on outstanding debt of corporations and countries. Sovereign debt swaps are the gorillas in the PIIGS room, but no one really knows if they are just 800-pound gorillas (large but manageable) or King Kongs .

Only if, or when, Greece defaults will we know who ultimately has sold insurance against that default. In 2008, it was a surprise to find out that AIG had sold a massive amount of insurance against the downgrade of sub-prime mortgages, and the federal government had to come to the rescue, to the tune of close to $200 billion.

The global macro-investment outlook has proven to be very tricky in 2011, with even the largest and most successful hedge funds suffering large losses so far this year. If Greece defaults and we learn of massive exposure by major American financial institutions, more shocks will be in store.

In the meantime, U.S. Treasuries have once again proven to be a deep and liquid safe haven. But I worry about what would happen if investors shun low yielding treasuries because of highly suspect credit worthiness.

Since the 2008 crisis, we have seen an implosion of sub-prime and other private debt replaced by an explosion of U.S. government public debt -- currently $14+ trillion -- and this is coupled with the very real risk that we could default on our debt payments in August if our politicians continue to play a high stakes game of fiscal chicken and are unable to increase the debt limit.

We are not Greece, many argue, but our country is clearly on an unsustainable path of deficits and increasing national debt and we must take steps to curb government spending and reduce debt levels.

The U.S. is too big to fail, right? But who would (could) bail the U.S. out？

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60，60mitigate   缓和，减轻    gorilla    大猩猩    swap    交换

We are not Greece, many argue, but our country is clearly on an unsustainable path of deficits and increasing national debt and we must take steps to curb government spending and reduce debt levels.
This is also apply to our country, especially local government. Regrettably, we even don't know how big the local government's debt is. Even our state-based banks have been the world's biggest, they still can't afford this kind of bad debt.

（转载）奥巴马7月2日最新电视讲话：削减赤字增加就业
July 02, 2011 WASHINGTON – In this week’s address, President Obama spoke to the American people about reducing the nation’s deficit and creating jobs across the country.  The President emphasized the need for Government to live within its means— just as families do—in order to put the nation on a fiscally sustainable path which is critical to long-term economic growth and job creation.  To solve the deficit problem, Democrats and Republicans must make tough choices and look at every tax loophole and program for opportunities to save money.  President Obama stressed the importance of trimming the budget while also making critical investments in education, research, and technology to spur job growth and invest in our future.  As families and friends join together to celebrate Independence Day, the President reminded Americans that since our founding, we have overcome challenges by coming together to solve our nation’s problems.

60,60

hold the bag  
vi. 两手空空(独自承担责任)
背黑锅, 替他人受惩罚，受害
credit default swaps
信用违约掉期
gorilla  
n. [C]  1. 大猩猩 2. (俚)暴徒,打手
King Kong
金刚, 金刚猩猩
to the tune of  
达…之多，共计
learn of  
获悉, 听说
in store  
贮藏着，准备着；必将到来，快要发生
in the meantime  
与此同时, 在此期间
shun
vt.避开，回避，避免
implosion
n. 向内破裂, 内向压挤, 内爆发音

It almost looks like a fad that every government has deficit and heavy burdens of debts, which threatens potential development. But at the same time, the expenditure keeps increasing and there is little sign of raising taxes. Of course, it has something to do with the financial crisis, which may be the main cause of today’s governments’ not making both ends meet. But sometimes, we have an illusion that many governments are competing for the deficit, here I mean, in an old Chinese saying, those children who cry have the right to drink milk.

If US government do not rescue the banks,it will fail though it big enough.
In China,I think our government will rescue banks for certain if they are in trouble.

Creating more jobs is much more important than reducing government spending. Employment is critical in that people need jobs to increase their confidence in their own lives as well as the economy!

有道理We are not Greece, many argue, but our country is clearly on an unsustainable path of deficits and increasing national debt and we must take steps to curb government spending and reduce debt levels.

The U.S. is too big to fail, right? But who would (could) bail the U.S. out？

Greece is a country with little political clout in Europe, and there were reasons for France and Germany admitted it into the EU.They allowed Greece, notwithstanding it was full of debt and couldn't match the fiscal stipulations, because they knew it would be the EU not just they two will pay for Greece crisis. The investment banks such as Goldman Sachs also played with Greece with its dazzling derivatives. Having already leaved their back door open then, they won't get hurt if the Greece defaults.