Markets are betting Greece makes it (and kicks on)

James Marlay

Livewire Markets

Three of Greece’s largest banks have rallied 30% in the last week (chart) as investors take a ‘glass half full’ view. A number of fund managers have recently put Greece under the microscope in search deep value amidst the barrage of negative headlines. In his weekly note to subscribers Alan Kohler shared these thoughts: “The most likely scenario is that Greece not only does not default or exit the eurozone, but it becomes the tiger of Europe, a fast-growing economy and possibly even one of the fastest growing in the world… Greece’s future is binary: either it collapses entirely and enters a short brutal depression far greater than the 25 per cent GDP and national income contraction of the past six years, probably with more political and social disruptions thrown in, or it survives this crisis and then outperforms the rest of the Europe, and possibly the world.” Kohler says the trick is to assess whether Greece is a 51/49 or a 80/20 chance of making it. If you believe the markets they are betting that Greece kicks on.

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James Marlay
Co Founder
Livewire Markets

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