Thursday, May 17, 2012

Greece: Who pulls the trigger?

boredom © fintag

News comments:
I am as bored as you.

Greece is to launch a new currency. Wow. How dull. Perhaps it is more interesting to see who will pull the trigger?

Will the new Greek PM ring up the EU and say they want to leave the Euro? Unlikely because without the bail out money, the PM doesn't get paid. Or will it be by default? The lack of new bail out cash will force the Greeks to issue a new currency to pay themselves? Or will the run on the Greek banks force a new currency to appear?

The media are trying to make out the exclusion of Greece from the Euro will lead to the great depression 2.0; this is greatly exaggerated and the Euro will hardly be impacted. The reality is the Euro will appreciate as Greece has been pulling it down.

But perhaps we are looking at the wrong trigger? As you know I have been very bearish about Spain for years and it is possible Spain could leave first.

Either way, it must happen quickly because dragging on for another year will mean we all move into cash; like GBP, USD and JPY which are all the currencies of countries with the largest debts in the world...

Today's shorts:
Poker final going on longer than predicted (fintag)

Santander launches new 95% mortgages (aol)

Today's longs:
Nomura get something right about Santander 2011 (fintag)

PIGS turn into PIS.