Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US Coronavirus Trend Trajectory Forecast Current State - 7th Apr 20
Boris Johnson Fighting for his Life In Intensive Care - UK Coronavirus Crisis - 7th Apr 20
Precious Metals Are About To Reset Like In 2008 – Gold Bugs, Buckle Up! - 7th Apr 20
Crude Oil's 2020 Crash: See What Helped (Some) Traders Pivot Just in Time - 7th Apr 20
Was the Fed Just Nationalized? - 7th Apr 20
Gold & Silver Mines Closed as Physical Silver Becomes “Most Undervalued Asset” - 7th Apr 20
US Coronavirus Blacktop Politics - 7th Apr 20
Coronavirus is America's "Pearl Harbour" Moment, There Will be a Reckoning With China - 6th Apr 20
Coronavirus Crisis Exposes Consequences of Fed Policy: Americans Have No Savings - 6th Apr 20
The Stock Market Is Not a Magic Money Machine - 6th Apr 20
Gold Stocks Crash, V-Bounce! - 6th Apr 20
How Can Writing Business Essay Help You In Business Analytics Skills - 6th Apr 20
PAYPAL WARNING - Your Stimulus Funds Are at Risk of Being Frozen for 6 Months! - 5th Apr 20
Stocks Hanging By the Fingernails? - 5th Apr 20
US Federal Budget Deficits: To $30 Trillion and Beyond - 5th Apr 20
The Lucrative Profitability Of A Move To Negative Interest Rates - Pandemic Edition - 5th Apr 20
Visa Denials: How to avoid it and what to do if your Visa is denied? - 5th Apr 20 - Uday Tank
WARNING PAYPAL Making a Grab for US $1200 Stimulus Payments - 4th Apr 20
US COVID-19 Death Toll Higher Than China’s Now. Will Gold Rally? - 4th Apr 20
Concerned That Asia Could Blow A Hole In Future Economic Recovery - 4th Apr 20
Bracing for Europe’s Coronavirus Contractionand Debt Crisis - 4th Apr 20
Stocks: When Grass Looks Greener on the Other Side of the ... Pond - 3rd Apr 20
How the C-Factor Could Decimate 2020 Global Gold and Silver Production - 3rd Apr 20
US Between Scylla and Charybdis Covid-19 - 3rd Apr 20
Covid19 What's Your Risk of Death Analysis by Age, Gender, Comorbidities and BMI - 3rd Apr 20
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Greece Election Result Will Postpone Europe's Economic Recovery

Politics / Eurozone Debt Crisis Jun 18, 2012 - 10:05 AM GMT

By: Bloomberg

Politics

Best Financial Markets Analysis ArticleToday on "Market Makers" with Erik Schatzker and Stephanie Ruhle, Mike Novogratz of Fortress Investment Group said that the results of the Greek election will postpone a recovery in Europe. He said, "If we had the Lehman moment it would have forced the European authorities to decide, are they in or are they out. But we've pushed the ball down the field."

Novogratz also said, "for your children's money you should be short every fixed-income instrument on the planet, or at least in the developed world...we're going to continue to have a lot of tension in the markets for awhile."


Novogratz on whether a Lehman moment for Greece is off the table:

"It is. It is kind of frustrating because at least if we had the Lehman moment, it would have forced European authorities to really decide if they are in or if they're out. With new democracy winning and most likely forming a coalition government in the next few days, we pushed the ball down the field a little bit further...Most likely we will hit a crunch time at some point."

"Greece is less important, but not out of the woods yet. You still have to form a government. Most likely that will happen in the next few days. Then the troika comes back. Greece will need more money, because in the last eight weeks they have not done a whole lot. That will not come from the IMF. They are going to say that the largest single investment we've ever made in terms of percentage and outright. They will have to renegotiate the Greek package and cut debt. That will be messy and take two months."

On whether Germany will have to kick in more money:

"The Germans know they are going to kick more money in. They are willing to kick more money in. They just do not want to look like the fool. They want to make sure we're making some progress on structural reform, labor market reform, fiscal market reform and there is some teeth to it, and she will not march all the way to the goal line before she declares victory...For your children's money, you should be short every fixed income instrument on the planet, or at least in the developed world--in the U.S., Europe, and probably Japan--and you should be long equities. Does that mean in the next few months that trade will pay off? Probably not. We're going to continue to have a lot of tension in the markets for awhile."

On whether the smartest trade right now is to shore German bunds:

"It very well could be. The ECB will cut rates by 50 basis points in the next meeting. That should inject liquidity into the system and inject some sort sense that the cavalry is coming. The most likely will do another LTRO. As they try to take some of the risk premium out of the market, bunds should sell off. I do not think you have a major sell-off in bunds however. On a leveraged basis, you can make a whole of money. That is how people get rich."

On how to trade Europe:

"This is a very difficult environment for everybody because there are lots of moving parts. You have to have a framework. We have a framework. We trade on relatively short time horizon. But there are some big thematic things that continue to happen. We are in a deflationary deleveraging, this year especially. Fixed income has a tendency to want to go lower. The highest fixed-income yields in the world in places like Brazil, those rates are coming down and so there are some core positions you can keep in your portfolio. You do not have to participate in the stuff with the least certainty around it. You do not have to own Italian bonds or Spanish bonds."

On how wrestling helps to prepare a career on Wall Street:

"14 of the 44 of the presidents of the United States were wrestlers. It teaches you toughness and discipline and teaches you to walk on your front foot...All sports prepare you to some degree. Wrestling you go through such a grueling training regimen from dieting and push ups to getting beat and smacked in the face and you are there on-on-one that you just become tougher. The two guys that took down the plane over 9/11 over Pennsylvania, Todd Beamer and Jeremy whose name I can never remember, both wrestlers. You learn not to be scared."

On whether he thinks the regulatory environment is killing Wall Street:

"No, I do not. I think we are in a transition. The banks and all of Wall Street screwed up. The push toward regulation is probably going too far and is not as clear as it could be. It will take a few years for that to settle down and become clear. I think it is great for the hedge fund industry. I do think if you are guaranteeing bank deposits in banks, those banks should take less risk. I think most people agree on that and they are. That transition causes a lot of turmoil though."

On Jamie Dimon's testimony to Congress last week:

"The problem is a lot of the guys in D.C. missed the nuance. If you try to regulate with lots of line items, you creating a big army...The check the box regulation ends up creating more complicated firms, lots of accountants and lawyers and compliance officers, and not necessarily achieving the goal. You can achieve it in a much simpler ways."

On bigger long-term investing:

"I think the markets are in a transition. A lot of that merchant banking business, long-term lending business and risk taking is going to move out of regulated entities and into hedge funds, private equities, private pools of capital. Where quite frankly, it is probably better stored. That does that does not happen overnight. In the process in between, credit growth shrinks, it doesn't grow."

On where he would want to invest if he was a client of Fortress:

"Right now if you look at historical valuations of stocks versus bonds and public valuations versus private valuations--if you are taking a longer-term view, having a lot of money in private equities is probably the right thing to do. It is the Rip Van Winkle trade. Sell all your bonds, buy a lot of stocks, go to sleep. We have central banks here and around the world that will try to inflate their way out of this debt mess, and they will. There is only one way out, and it is inflation. It does not mean bonds will sell off dramatically. You will have a financial market repression era where we keep nominal interest rates low and run inflation 2.5-3-3.5-4% and slowly get ourselves out of this debt mess. That's good for risk assets. Public equities is probably the place to be."

bloomberg.com

Copyright © 2012 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules