In my opinion, the certainty is very high. Correct me if I am wrong. Let me explain, there are two major hurdles for Greece NOT to default.
· Parliament has to approve and implement the austerity plan (amidst protests and violence in the street of Athens)
· Could Greece live up to the austerity plan after implementation? (Did Greece live up to the austerity plan implemented in 2010?)
What do you think? Please read on.
Have you read the post Story of a boy named Grease? (Could Grease change his lifestyle, lower the standard of living, live through budget until debts are cleared)
While Greece has to follow the austerity measures, do you think she has the ability to be competitive with Germany, France, the rest of the EU or globally? What do you think? The answer is not impossible but the long and winding road is definitely not a bed of roses!
What is also happening? Do you think if any members of the EU, ECB or IMF think that Greece is unlikely to default? The following might help (links not provided):
· French debt rollover for Greece (Why the rollover?)
· German Banks back French Debt rollover for Greece (What’s the German and French exposure?)
· German banks moved closer to participating in a Greek bailout ahead of Thursday's summit called by the German government to discuss private-sector involvement. (Why prep a Greek bailout?)
· European Banks scrambling to prevent default by Greece (Why the preparation?)
· China invests in Europe?
Why all the publicity? Why all the preparation if Greek were to default? (Are they not confident the austerity will pass through Parliament?) Why are they so concerned?
What is going to happen from current till the announcement? Read Speak now or forever hold your peace
The default is an almost certainty. It need not be this week and I do not really know when? (Anyone has a crystal ball?)
Could it be this coming Thursday? If it does, the week will end bad, very bad. After which I am sure ALL (EU, ECB, IMF) will meet somewhere and come up with a drastic solution over the weekend. By Monday morning, a solution will be unveiled to calm the markets. (The Asian financial crisis was triggered July 1st 1997, deja vu! European financial crisis?)
If the austerity plan is passed (this is a no brainer) Asian equity markets will rally, followed by Europe and then US. Whatever the US data is to be announced on Friday, the Greek result will blanket any news – bad or good!
Having laid down the scenario, what do you think? Risk on or risk off? The decision is entirely yours!
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