We said in our Q4 2009 report that we were uncomfortable with implied expectations going into 2010 and that it would be highly unusual for 2010 to repeat the same level of positive factors. We also said that we were increasing the percentage of cash in our funds.
Enter Greece and other European “peripheral” countries. Investors are finding it hard to simply exit “crisis mode” after the traumatic events of 2007/ 2008. We won’t fall into the trap of discussing Macro issues – not our core skill anyway – because the main issue here is that volatility, that friend of the long-term investor holding a lot of cash, is on the rise. This post collects some very interesting articles by the Financial Times on the subject of Greece’s (and Europe’s) woes, just as food for thought.
Why the Financial Times, a paid source? Because it’s the best coverage of European markets and economies. We highly recommend this source.
LINKS:
Greece part of unfolding sovereign debt story – Jan. 29th, 2010 – Mohamed El-Erian, CEO of PIMCO (world’s largest bond investor) discusses the EU’s options in light of the Greece situation. The major takeaway is that there is no easy solution, and therefore no solution without its scares and fits of panic.
Tipping the scales on global rebalancing – Feb. 2nd, 2010 – Bond investors are increasingly jittery and why the US and Asia seem safer than Europe.
Medicine for Europe’s sinking south – Feb. 3rd, 2010 – Economists Nouriel Roubini and Arnab Das write about how Greece is the front line of a larger battle for European stability – and again the tone is pessimistic since no easy solution appears in sight.
EC: A toothless regent in Greece? – Feb 3rd, 2010 – FT’s Money Supply blog on the obviousness of how the European Commission’s lack of powers ultimately leads to situations such as Greece’s. Will these debacles lead to increased scrutiny and – more necessarily – intervention?
Record volumes for sovereign CDSs and Portuguese bonds hit as Greece fears ease – Feb. 4th, 2010 – Greece’s plan is greeted with skepticism and pragmatism – bond investors have apparently decided that the next country in “the line of shame” is Portugal.
Tags: contagion, Europe, globalfinancialcrisis, macro, portfoliomanagement, riskmanagement, sovereign
