Is Greece Just the First Domino?

Will the rest of the Eurozone fall in sequence after Greece defaults?

Will this Greek drama go out on a global tour?

That’s the fear as officials in Athens scramble to work out an austerity plan to avoid defaulting on the nation’s sovereign debt while some Greek voters riot in the streets.

Some market watchers worry Greece 2011 could be a replay of Lehman 2008 when it comes to market performance and economic growth. Greece defaults, markets tank, and the global economy spins into severe recession.

Of course, the ultimate result of default could be the next Great Depression with Europe as economic ground zero.  With our hopelessly intertwingled global economy it's impossible to say what the effects of a Greek default would really be until it happens.  But comparing a sovereign default to the collapse of Lehman Brothers seems to undervalue the catastrophic extent of a national default.

The biggest risk, however, isn’t Greece per se. It is the prospect of other peripheral euro members — Ireland, Spain, and Portugal — following Greece down the default path. That cascade effect has to be avoided.

The U.S. and global economies are in better shape than they were in 2008. If time heals all wounds, three years have gone a long way in healing economic excesses and the world banking system.

Belief in the "healing" that has gone on is, to me, hopelessly naive.  The banks continue to spin out impossible-to-regulate derivatives by the truckload and we sit by hoping that "it'll all work out."  Believe me, I'm thinking about building a bunker in the back yard and stockpiling food, weapons and ammo.  It could be just that bad.