There is a good possibility that Greece will default in the next week. In fact possibly Monday. Note that this is still highly speculative and there is no hard evidence for it. However, if I hadn't sold my stocks back in April I would be getting out. That's just me though.
The danger sign is that the ECB has suddenly decided to swap its Greek bonds for ones which are senior to everyone else's, which means that it alone is safe in a Greek default. Now, of course being stupid, the market immediately rallied. However what it means is that the ECB has suddenly changed the rules of the game which casts doubt on bonds everyone else has in Italy, Portugal etc. Which is why the market rally was stupid, regardless of whether Greece defaults. One plausible reason for the ECB strange behaviour is that it is front-running a Greek default in exchange for promises to maintain financing to Greece afterwards.
This along with the changing rhetoric from northern Europe in the last few weeks along the lines of "You know I think we can handle a Greek default" and even the Greek finance minister saying there were a lot of governments in Europe who didn't want Greece to stay in the Eurozone suggests that Germany et al. may not bail out Greece. In fact recently, everytime Greece promises something, Germany or other Northern European nations ups the ante.
Also to add some extra cheer, the Chinese commerce ministry says the exports outlook is grim and the IMF expects that if the European situation blows up, Chinese growth may halve.
http://www.bloomberg.com/news/2012-...a-second-time-as-europe-threatens-growth.html
Articles on Greece (some just noting the odd moves and not actually necessarily supporting the Greece default thing - as I said this is highly speculative):
http://www.dowjones.com/products/dj...IGNARELLAWillGreecedefaultasearlyasMonday.asp
http://www.macrobusiness.com.au/2012/02/greece-is-out-of-time-again/
http://blogs.reuters.com/felix-salmon/2012/02/17/the-greece-game-turns-chaotic/
http://seekingalpha.com/currents/post/153241?source=feed
Anyway, it will be interesting to see what happens next week!
The danger sign is that the ECB has suddenly decided to swap its Greek bonds for ones which are senior to everyone else's, which means that it alone is safe in a Greek default. Now, of course being stupid, the market immediately rallied. However what it means is that the ECB has suddenly changed the rules of the game which casts doubt on bonds everyone else has in Italy, Portugal etc. Which is why the market rally was stupid, regardless of whether Greece defaults. One plausible reason for the ECB strange behaviour is that it is front-running a Greek default in exchange for promises to maintain financing to Greece afterwards.
This along with the changing rhetoric from northern Europe in the last few weeks along the lines of "You know I think we can handle a Greek default" and even the Greek finance minister saying there were a lot of governments in Europe who didn't want Greece to stay in the Eurozone suggests that Germany et al. may not bail out Greece. In fact recently, everytime Greece promises something, Germany or other Northern European nations ups the ante.
Also to add some extra cheer, the Chinese commerce ministry says the exports outlook is grim and the IMF expects that if the European situation blows up, Chinese growth may halve.
http://www.bloomberg.com/news/2012-...a-second-time-as-europe-threatens-growth.html
Articles on Greece (some just noting the odd moves and not actually necessarily supporting the Greece default thing - as I said this is highly speculative):
http://www.dowjones.com/products/dj...IGNARELLAWillGreecedefaultasearlyasMonday.asp
http://www.macrobusiness.com.au/2012/02/greece-is-out-of-time-again/
http://blogs.reuters.com/felix-salmon/2012/02/17/the-greece-game-turns-chaotic/
http://seekingalpha.com/currents/post/153241?source=feed
Anyway, it will be interesting to see what happens next week!