The NO voters of Greece sure are very happy at the the result of the referendum voting held Sunday.. The result showed a clear victory for the present Govt. which has been favouring a NO vote which , on the face of it, authorises Greek Prime Minister Mr Tsipras to continue to take a hard stand on Greek's creditors. This in practical terms means not meeting it's debt obligations.
Is that going to be easy ? Far from it. People on the other side also have their reasons to be hard. After all, for how long can others keep bailing out Greece. There are many other countries also which are likely candidates for debt default sooner or later. Will those countries be bailed out as and when situation comes. From where are the funds going to to come from. Is printing money going to be a panacea for all financial ills. And why should prosperous countries fund lesser ones and promote inefficiency. What if the IMF or the ECB stop lending any further. Same goes for Germany and France what if the also stop lending.. These are few questions whose answers will be keenly awaited. Its no brainer what the fate of Greece will be. I can't imagine how Greeks are going to survive without any money. Cyprus has shown the world what scenarios play out in such situations.
It will be interesting to see how Greek leadership manages to keep the country afloat.
But there is more to it than just wriggling out financial deals.with creditors. The economic quagmire that Greece is in is just the tip of the iceberg. At he moment there are indications of a repeat of a global financial crisis. Right now world's second largest stock market, Chinese stock market has crashed by more than 20%. resulting in wiping out something like $3 trillion of paper wealth. Can the Worlds largest stock market i.e. US continue to go up. But what is worrying is that efforts are being made to prop up the stock market. Which means it is not in a position to recover from the fall in the normal way. Crude also has corrected severely, Similar is the situation for commodities.
On the domestic front, nothing much has changed for the better. Corporate earnings continue to remain void of any impulse.as had been expected a year earlier. Further any adverse global event is bound to have its share of impact on our markets.
It is time to start cashing out of equities gradually.
More in my next
Happy investing
Basudev
.
Is that going to be easy ? Far from it. People on the other side also have their reasons to be hard. After all, for how long can others keep bailing out Greece. There are many other countries also which are likely candidates for debt default sooner or later. Will those countries be bailed out as and when situation comes. From where are the funds going to to come from. Is printing money going to be a panacea for all financial ills. And why should prosperous countries fund lesser ones and promote inefficiency. What if the IMF or the ECB stop lending any further. Same goes for Germany and France what if the also stop lending.. These are few questions whose answers will be keenly awaited. Its no brainer what the fate of Greece will be. I can't imagine how Greeks are going to survive without any money. Cyprus has shown the world what scenarios play out in such situations.
It will be interesting to see how Greek leadership manages to keep the country afloat.
But there is more to it than just wriggling out financial deals.with creditors. The economic quagmire that Greece is in is just the tip of the iceberg. At he moment there are indications of a repeat of a global financial crisis. Right now world's second largest stock market, Chinese stock market has crashed by more than 20%. resulting in wiping out something like $3 trillion of paper wealth. Can the Worlds largest stock market i.e. US continue to go up. But what is worrying is that efforts are being made to prop up the stock market. Which means it is not in a position to recover from the fall in the normal way. Crude also has corrected severely, Similar is the situation for commodities.
On the domestic front, nothing much has changed for the better. Corporate earnings continue to remain void of any impulse.as had been expected a year earlier. Further any adverse global event is bound to have its share of impact on our markets.
It is time to start cashing out of equities gradually.
More in my next
Happy investing
Basudev
.
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