Thursday, 2 June 2011

"The Longer you Wait the Higher the Haircut. Greece is not Even in the EU's Hands. Let this be a Warning to the U.S."

 

In the video below, Terrence Keeley at Sovereign Trends LLC discusses Greek restructuring, why Germany backed down on restructuring, and what it ultimately means. The video is outstanding, please play it.
If the video does not play here is the Bloomberg link Sovereign Trends' Keeley Interview

Terrence Keeley, senior managing principal at Sovereign Trends LLC and a Bloomberg Television contributing editor, discusses the outlook for additional aid to Greece from the European Union. EU officials will decide on more aid by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the group of euro-area finance ministers. Keeley speaks with Erik Schatzker on Bloomberg Television's "InsideTrack."
Key Quotes
  • The Longer you wait the higher the haircut.
  • Germany backed off over bank threats, Europe is ill-prepared for restructuring.
  • A lot of people talk about getting Greece back on its feet. The truth of the matter is Greece has not been on its feet for several millennium
  • 40% of Greek GDP is government workers. Until that problem is fixed there is no solution for Greece's economy.
  • The reality is Greece is a goner, Ireland is very, very tough and Portugal is the same. We could have more.
  • Keeping the Brady Plan in your back pocket is a very good idea.
  • Everyone is clapping their hands this morning but Greek CDS imply a 70% chance of default. The market expects Greece to default, and the market is right
  • This is not even in the EU's hands.
  • Let this be a warning to the United states. The US can still control its situation, Greece cannot.

I agree with everything Terrence Keeley said in the interview.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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