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How will a Greece bailout impact local U.S. companies?

Copper smelter at Mount Isa Mines

Copper smelter at Mount Isa Mines. Credit: Xstrata

As the clock ticks on an expected second bailout for Greece — this one amounting to more than $170 billion dollars, according to MarketWatch, the headlines are a good opportunity to catch up with local stories about exposure to European markets — financial, consumer and wholesale, among others — among your area’s companies, investors and workers.

Indeed, it’s almost difficult to imagine any sphere that doesn’t have ties across the pond, or that isn’t influenced in some way or another by global fluctuations in commodity prices or currency values, at least.  Copper, for example, gained a bit yesterday based on news from China and a euro strengthened by bailout news, according to Bloomberg Business Week.  You can bet that’s of interest to plumbers, electrical contractors, construction companies, wholesalers,  scrap dealers and people who steal electric wiring for a living.  Not to mention sellers of copper-alternative PVC piping.

I’m not saying they’re all glued to the morning copper market report, but that’s just one little example of how some brainstorming can find some viable angles on just about any beat,  if you’re inclined to connect to  global headlines.

This Financial Times piece, for example, is very instructive; it notes that corporate earnings guidance from U.S. companies is increasingly vague given uncertainty about currencies, commodity prices and demand.

Here’s a great Economix blog post by Catherine Rampell at the New York Times, outlining several other areas of exposure for the U.S. economy, from the stock market — as she points out with a graphic, the U.S. and European markets are strongly correlated — to debt contagion.  Here’s a similar primer from Reuters; keep in mind that both articles were written last fall so specific assumptions might be outdated, but the general concepts still are valid food for thought and — more to the point — fodder for interviews with economists, executives and small business operators in your area.

Here’s the U.S. Department of State’s backgrounder on Greece, including trade stats, which note that we have a rather large trade surplus with that country.  The means the outcome of the bailout and its ripple effect on consumers and industry will have ramifications for plenty of American firms.

Talk to companies about what they’re watching, what they fear and what they hope for from measures to buoy Greece and all of Europe.

As I always say, who benefits?  While companies selling abroad, or those holding European bonds (or stocks!) or otherwise depending on the purchasing power and creditworthiness of overseas debtors and consumers may be on tenterhooks, others may see a glass half full.

This New York Times piece from December, “U.S. firms see opportunities in Europe’s woes,” looks at how American banks are snatching up customers, real estate and other assets overseas.

About the Author

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

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