On Wall Street, these fabulous European vacation destinations are known simply as the PIGS-- short for Portugal, Italy, Greece and Spain. You may come to know them as the latest scourge to your 401(k), just when it was starting to look like something you might retire on again someday.

The financial markets are obsessed with the PIGS right now. All four of them, and especially Greece, are reeling under crushing government debts. Global investors have little confidence they'll be able to keep paying them, so their cost of borrowing money has gone way up, driving the PIGS into an even deeper hole.

There is talk of default and fear of contagion, as investors question how many more governments have run up bigger bills fighting this recession than they will ever be able to repay.

Related
Want Weather Forecast? Ask Wall StreetDow Climbs Above 10,000Dow Closes Below 10,000 for First Time in 3 Months"It is a dangerous situation," says University of Chicago economist Rajan Raghuram, who says he believes another full-blown global credit crisis is possible.

"We could go right back to where we were," says Walter Russell Mead of the Council on Foreign Relations. "Even seasoned market participants don't know what will happen next."

Case in point: on Monday the Dow Jones industrial average dropped more than 100 points on concerns Greece was about to default on its debts. On Tuesday, the Dow rose 150 points on rumors a consortium of European nations, led by Germany, may be preparing to bail out Greece.

"Sovereign credit risk is the risk factor du jour," says Tony Crescenzi, a senior vice president at PIMCO, a global investment management firm.

Just as investors once worried about over-leveraged banks -- and how far the fallout would reach if they failed -- they now worry about over-leveraged countries.

"It's a typical aftershock after a big banking crisis to get a big sovereign debt crisis," says Harvard University economist Ken Rogoff, who has just co-authored a book on financial crises.

And it's easy to see why: All those government bailouts helped big banks and big companies get out from under their debts, but they did so by shifting the burden onto governments.

We've certainly seen a worrisome growth in government red ink in the United States. But investors are not really concerned about the ability of the U.S. Treasury to pay its debts. They worry a lot about whether Greece will.

Related
RSS Feed: Send News to Your ComputerAnd with 27 European nations now joined in monetary union, the desperate state of the PIGS is a crisis not only for them but their neighbors on the continent. The fiscal sins of Greece have the potential to threaten Germany.

Rogoff says the people of Portugal, Italy, Greece and Spain should brace themselves for severe austerity measures, but no Europeans should expect to escape the pain: "Europe faces a deeper and longer recession than anyone hoped."

The prospect of a prolonged recession in Europe helps explain why your 401(k) has taken a tumble recently. The strength of the American economic recovery depends in no small part on the rest of the world getting back on its feet. It won't be good for American companies if Europe wallows in recession, especially with American consumers in little mood to spend.

If there is a winner here, it may be American tourists. While the PIGS' problems have been terrible for the euro, they've been a boon to the dollar.

"If you have plans for a European vacation," Mead says, "you're loving every minute of this
-----------------------------------------------------
maybe we will get an influx of Americans this year?

Wish I had'nt read this now

You can always rely on Nick to be the bearer of glad tidings

I'm sorry you see it that way, but I guess the smiley helped to say you weren't totally serious
It is always better to be prepared, IMHO...and I don't think Gormless Gordon, OR his Socialist press/propaganda machine can be relied upon to give the TRUTH. Especially when they hope to get re-elected this year. God help the UK if he does...but then, we only get the Government the MAJORITY deserve.
Obviously I hope that the dire situation that the Western World finds itself in, currently, will improve dramatically, and rapidly too. A far worse scenario is, possibly, on the horizon: should the Middle Eastern petroleum producers decide to dump the Dollar as a trading currency, and reject replacing it with the Euro and go with a Middle East currency, there will be far worse repercussions for the whole Western World. let's hope it won't happen.

Hey sage are you dusting down the elvis suit for one more year or going to get a proper job

Heck NO!! I sold the whole lot...suit, belt, boots and glasses in 2008!(including 4 gallons of hair dye!! hahaha!! karaoke too. I still have my 4 guitars, Fender amp. keyboard, and radio mikes..anybody interested??]
I am looking for a proper job now though..anything will do!!

i guess elvis has defintely left the building

how much for the radio mikes?

To be completely honest, Keith, you can buy them in Sumtronic in Reus for around 100€. They are a pair, working through a single receiver, and worth every cent! At that price new, it just isn't worth me selling them secondhand..I would have to accept less than they are worth to me. I still like to play my instruments at home, and although I can't stand my own voice (who DOES like their own voice anyway? ), I like to warble a bit too! If you need some when you are over, I can direct you to where to get them. If I were to sell, i would want to sell the lot!! Then I would be well and truly past it !!

never mind sage,thanks anyway, i have found a website where i can get a pair of radio mics for a decent price to use on a summer sports day but will also be useful for my dj gigs but thanks anyway