Wall Street has been very volatile because of concerns about Greece and the implications for the Eurozone. Why?
There are reports that AIG (nationalised by US government) could be liable for credit default swaps it wrote with European banks. Juz as Germans are not amused that they are subsidising corrupt Greek civil servants and tax-evading doctors, all with hedonistic life styles, Americans will not be pleased that their money (via AIG) is going to save European banks.
There could be other credit default swaps written by banks like fat, lazy, last in class, last to get sex Citi.
But there is a bigger macro issue. FT reports that Nearly half of the S&P 500’s revenue now comes from abroad and almost 30 per cent from Europe, compared with only 12 per cent of US output from gross exports, a fact that boosted dollar earnings substantially in recent years. That effect may soon go into reverse, however, as the euro takes a tumble and China faces pressure to revalue the renminbi.