Why Today's Greek News Is Unfounded

by: Markos Kaminis

Today's Greek News story, alleging that Greece is seeking better terms to an EU/IMF deal is unfounded. The Greek news is baseless because there is no formal agreement in place, and the IMF has not been approached as yet by Greece. However, we expect Greece to seek to soften EU and IMF demands, as the austerity measures it seeks to impose on its population are simply impossible to accomplish in an effective manner.

Today's Greek News

While we expected international data to drive the global marketplace this day, the specific driver jumped on board from outside of scheduled reports. The day's market drivers included an unfounded and inconsequential report about Greece, alleging that Greece is seeking to adjust terms with the IMF and EU. While we agree that this will occur, we do not expect it to nullify the EU's pledge of assistance. That EU pledge is what has stabilized Greek securities and bond yields, and as it still exists, today's drop in Greek bond yields is unfounded. Therefore, we suggest it wise to take advantage of the decline for those favoring long trade positions in Greece (at least short-term). A few Greek equities to consider include National Bank of Greece (NBG), OTE (OTE) and Coca-Cola Hellenic (CCH).

Greek Troubles Renewed

Unconfirmed information from a relatively young news source had Greek bonds diving and the euro weakening today. The news service reported that Greece may be seeking to amend its agreement with the EU and IMF due to the tough conditions of the agreement. The problem with this whole bit of misinformation is that there is no real deal yet, only a formal and public assurance of support from the EU. The IMF could eventually be involved based on discussions and supposition, but is not involved yet; not until Greece comes to it for aid. Also, the IMF itself denied that Greece came to it at all today. It is, however, very likely Greece will seek some softening from its backers when the time comes, given a high degree of difficulty in imposing strangling austerity measures on its people.

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