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“There are some significant parallels between Greece and Lehman, and theyr’e related to the human personality,” Blackstone economist Byron Wien told a conference of investors sponsored by Bloomberg Link today.According to Byron, Greece’s got itself in a mess in much the same way Lehman Brothers did–hubris.
Lehman’s management repeatedly turned down offers from the Federal Reserve to purchase the investment bank, and in its pride finally had to be punished.
That’s not much different than Greece’s relationship to the eurozone.
“You have here an economy that has overspent enormously…[and there’s] no way that they can possibly have earnings or gdp that will support their debt level,” Wien said. “Its a question of whether they can engage in the steps that will protect their economy.”
Regardless of the comparison, however, Wien took an optimistic view of Europe’s prospects, pointing out that Greece is a small part of the eurozone and accounts for a limited percentage of the country’s GDP. “My view is they will figure out a solution to keep the eurozone together…but i dont know whether that will be true three years from now.”
His odds of a recession in the U.S. this year? 20%.
SEE ALSO: Byron Wien’s 10 Predictions For 2012 >