Enzio's Clock

Background

1. Another date to watch out for

In this week's FT FM we read that in April/May, about US$220 bn in Greek debts come due. This will be the first test of Greek resolve to solve her various debt crises. 

The second big date is July, by which time she must have reduced her debt/GDP ratio by a full four percentage points.  Dream on...

Meanwhile, the Germans understandably are angry at getting roped-in to having to bail Greece out, but as stated in said FT FM, "There is an almost universal belief that should the worst happen, Greece will be bailed out."

2. How to Save Money Off This Idea

1. Always consult your financial adviser first.
2. Do NOT do anything about Greek bonds until they start representing value. My guess is that the first "default" will be this April/May, when said $220 billion fall due.  The German and French banks will be most hit by Greek inertia, so expect the share prices of those banks with the biggest Greek exposure to droop during this time.  Maybe you want to take a punt and even short such banks - for now?
3. The next date to wait for is July, by which time the Greeks are supposed to have reduced their debt/GDP ratio by a full four percentage point.  Dream on.
4. Note one investment conclusion in said FT FM: "...hedge funds are now taking levered bets on Greek debt...while figures from Data Explorers suggest there has been no pick up in shorting of Greek bonds, with 10 per cent of issuance on loan, the same as a year ago (compared to 59 per cent of Romanian sovereign debt)."Thus, we are in good company when advising you NOT to short Greek bonds.