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I meant to post something Sunday night or Monday morning on CAPM and Warren Buffet’s letter to shareholders, but I’ll get to that soon.

Right now, the most prominent news is that S&P has official rated Greek debt to be in selective default. In my previous post, I had mentioned how Greece was having problems collecting taxes. Also I mentioned this was beginning to spread into other countries, specifically the UK.

While taxes may not be the only source of revenue, it goes to show that some countries need to be more aware of their financial situations. I brought up the UK as an example because I saw an article on it. Last August, S&P had downgraded US debt, not because of our ability to pay but more on where the funds were coming from.

Now I’m not saying the US is having the same problems as Greece. In Greece, people are protesting out on the streets about wage reductions while the politicians are freaking out trying to figure out what to do. In the US, we have people complaining about a 99% and the politicians are going through the same motions. Not freaking out, but certainly much closer to a solution than in Greece, as long as people can get their egos checked.

That being said, I have a much more positive outlook here as long as people are willing to collaborate and compromise.

I had a finance professor, Yiorgos,  who after confusing everyone with crazy valuation methods, he would say “It’s all Greek to me!” and laugh. The funny part about it was, he was Greek. So to him it made sense. He was a smart guy.

I would also say he’s smart because he decided to leave Greece to teach at the University of Virginia, given the mess going on there today. And there’s been recent news about the bailout going on this week. Originally this post was going to be about that until two of my friends shared links that really caught my attention.

It’s on how tax revenues in the UK fell. 

Now from what I’ve read on Greece in the news and from Michael Lewis’s Vanity Fair article which you can read here, a major problem was people who have their own businesses not reporting income tax. This is a common thing in many emerging markets, but to see it happening in the EU is kind of scary. I’d be more worried if it were Germany but at least the situation is contained to one of the weaker countries in the EU.

But now, we have that problem happening in the United Kingdom? I find this to be very scary.  Why the country isn’t checking up on people paying taxes is beyond me. Look, we all hate tax collectors. It’s an international thing. But you can’t argue that we don’t need them because when you look around the world that don’t have enforcement on paying taxes, it just doesn’t get done. Once that starts happening is when you see emerging markets become more stable. But now, in some of the more powerful countries this is happening?

It’s all Greek to me.