Daal
Registered: Oct 2002
Posts: 9019 |
11-12-12 08:15 PM
I'm not sure the risk of Grexit has been eliminated. I don't think it was significantly reduced either. ECB's OMT won't involve Greek bonds, I don't see any indication from the ECB that they will do that nor the political will is there to do that
So the risk to this trade is to have the assets redominated. I like the idea of buying a heavily beaten down stock market that people call others stupid to buy, I think most of the time it will work and there are excess returns there
But in this case the question has to be answered with regards stabilization of the debt to GDP ratio and how the country will achieve its sustainability inside the EUR. I just don't see it, they are on track to be Japan but worse. Japan has been a contrarian play for a long-time but it didn't work
Tight fiscal policy for years + Tight monetary(or neutral) policy = stagnation
Even if the ECB lossens up a little, they do it for the whole region so whats loose for most of the EUR zone is not loose enough for Greece
A grexit ITOH would make me want to buy a ton of greek stocks
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