Not Everyone Is Betting Against Greece

By www.ForexConspiracyReport.com
Not Everyone Is Betting Against
Greece

http://www.forexconspiracyreport.com/not-everyone-is-betting-against-greece/
The Greek debt crisis continues along
with the threat of Greece exiting the
EU and the Euro.

Things look pretty grim but isn’t that
just when one should invest,
according to the old blood in the
streets analogy?

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The New York Times reports that not
everyone is betting against Greece.

American billionaire Wilber L. Ross Jr.
is investing in the Greece debt deal.

Mr. Ross, who built his career
investing in distressed assets, is the
ringleader of a group of investors who
last year pumped 1.3 billion euros, or
about $1.47 billion, into Eurobank
Ergasias, the third-largest bank in
Greece.

In the weeks to come, the fate of Mr.
Ross’s money – along with the whole
Greek financial system – may hinge
on whether the country’s leftist
government can avoid the chaos that
would accompany an exit from the
Eurozone.

In the interim, Greek banks are in a
perilous state. The uncertainty about
the country’s future means that Greek
banks cannot raise cash on the
international monetary markets.

Without cash, the banks cannot lend.
The result is a vicious circle in which
businesses cannot get credit, hurting
employment and profits and causing
tax receipts to decline just when the
government in Athens desperately
needs cash.

Mr. Ross is not a billionaire because
he is dumb.

This man has made a lot of money
investing in both Ireland and Cyprus
which had similar dilemmas.

Partly the strategy is that Europe must
reach a deal because the
consequences of a Greek exit
followed by others are unthinkable.

Playing Games

Bloomberg asks, what game is
Greece playing? Is it, as Bloomberg
suggests, a game of chicken?

While not everyone is betting against
Greece many are wondering just how
the two sides are going to get together
and structure a lasting, functional
solution.

The repeated willingness of Greece
and its creditors to bring the entire
euro area to the brink of disaster
presents a difficult and fascinating
question for economic theorists: What
game are they really playing?

On the surface, it seems like a classic
game of chicken, in which each side
tries to look determined enough to
make the other crumble.

The creditors, including the European
Union, the International Monetary
Fund and the European Central Bank,
insist that they can’t provide any more
debt relief or loosen their austerity
demands any further.

Greece pushes for more, suggesting
that it is willing to default on its debts,
possibly triggering an unraveling of
the monetary union, if it doesn’t get its
way.

It might also be a prisoner’s dilemma,
as my Bloomberg colleague Justin
Fox suggested back in February.

Both sides would be better off if they
cooperated, but distrust prevents them
from doing so.

As a result, the creditors keep
demanding terms far too onerous for
Greece to meet, and Greece edges
toward a disorderly default that would
be the most costly outcome for the
creditors.

The reason for the European Union is
to foster relationships based on trade,
mutual trust and mutual success.

None of this currently working out for
Greece as austerity measures have
essentially killed its economy.

The powers that be in the EU need to
remember its reason for being. This
real progress will happen.

Stocks Halt Selloff

Proof that not everyone is betting
against Greece came from the stock
market which turned around on good
news about negotiations over Greek
debt. Reuters reports on Greece
hopes.

U.S. and European shares rebounded
after several down days on
Wednesday, with Wall Street surging
on a report that Germany may be
satisfied with Greece committing to at
least one economic reform in return
for aid.

The German government may settle
for a clear commitment by Greece to a
measure upfront to unlock aid,
Bloomberg reported, citing two people
familiar with Germany’s position.

It may be that Germany, at least, has
come to terms with the need to give
Greece a little breathing space in
order to forestall a disastrous exit from
the Eurozone.

Not Everyone Is Betting Against Greece

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Not Everyone Is Betting Against Greece