http://profitabletradingtips.com/trading-investing/crisis-talks-in-greece
Crisis Talks In Greece
It seems that no one is happy in Greece and very soon everyone will have more about which to be unhappy. Crisis talks in Greece are focused on forming a government. Greece has a parliamentary system in which voters elect ministers of parliament. The political party that gets a majority gets to form a government and make one of their people the head guy, the Prime Minister. If no single party gets a majority it is possible for the lead party to negotiate with another party or two in order to get enough votes in parliament to form a government. When the vote is split among several political parties with widely differing political views the job is more difficult. And that is the focus of current crisis talks in Greece. The point of all this for anyone who trades stocks, commodities, Forex, or futures or options on these is that the situation and resulting crisis talks in Greece are upsetting markets worldwide. Greece is the focus of global attention because the Euro Zone is dealing with a widespread debt dilemma by tightening its collective belt. The belief of voters in Greece as well as France is that Euro Zone austerity leads to recession. People are out of work and angry. And they are voting their sentiments.
What specifically disturbs investors and interests traders is that the crisis talks in Greece need to succeed in forming a government or Greece will go back to vote again the second half of June. By that time Greece is supposed to have undertaken specific austerity measures in order to receive the next installment in a painfully negotiated bailout. It Greece does not follow through due to lack of a functioning and willing government it will not receive the bailout funds and it will default on government bonds that will come due at that time. Experts forecast a run on Greek banks and a return of Greece to the Drachma, its currency prior to entering the European Union and taking on the Euro as its currency. The problem for Greece is that its debt is denominated in Euros so that if it switches back to the Drachma it will need to print a lot them and hugely devalue them in order to pay off its debt. That assumes that anyone will want to accept them. A stock trading strategy at this time needs to take into consideration the possible effects of a Greek deb default, a run on banks across Europe, collapse of credit from these banks, recession in Europe, and a global economic downturn. It turns out that crisis talks in Greece deserve global attention.
Those holding Greek debt bonds are in a funk and have been for a couple of years. Bank stocks in Europe may be hit badly if crisis talks in Greece fail. Then, will US bank stocks fall as well? Factor in the JPMorgan loss of $2 Billion in six weeks with credit default swaps and you have an argument to short bank stocks or buy puts on the same stocks.
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3. It seems that no one is happy in Greece and
very soon everyone will have more about
which to be unhappy.
Crisis talks in Greece are focused on
forming a government.
www.ProfitableTradingTips.com
4. Greece has a parliamentary system in
which voters elect ministers of
parliament.
The political party that gets a majority
gets to form a government and make one
of their people the head guy, the Prime
Minister.
www.ProfitableTradingTips.com
5. If no single party gets a majority it is
possible for the lead party to negotiate
with another party or two in order to get
enough votes in parliament to form a
government.
www.ProfitableTradingTips.com
6. When the vote is split among several
political parties with widely differing
political views the job is more difficult.
And that is the focus of current crisis
talks in Greece.
www.ProfitableTradingTips.com
7. The point of all this for anyone who trades
stocks, commodities, Forex, or futures or
options on these is that the situation and
resulting crisis talks in Greece are upsetting
markets worldwide.
www.ProfitableTradingTips.com
8. Greece is the focus of global attention
because the Euro Zone is dealing with a
widespread debt dilemma by tightening its
collective belt.
The belief of voters in Greece as well as
France is that Euro Zone austerity leads to
recession.
www.ProfitableTradingTips.com
9. People are out of work and angry. And they
are voting their sentiments.
What specifically disturbs investors and
interests traders is that the crisis talks in
Greece need to succeed in forming a
government or Greece will go back to vote
again the second half of June.
www.ProfitableTradingTips.com
10. By that time Greece is supposed to have
undertaken specific austerity measures in
order to receive the next installment in a
painfully negotiated bailout.
www.ProfitableTradingTips.com
11. It Greece does not follow through due to lack
of a functioning and willing government it
will not receive the bailout funds and it will
default on government bonds that will come
due at that time.
www.ProfitableTradingTips.com
12. Experts forecast a run on Greek banks and
a return of Greece to the Drachma, its
currency prior to entering the European
Union and taking on the Euro as its
currency.
www.ProfitableTradingTips.com
13. The problem for Greece is that its debt is
denominated in Euros so that if it switches
back to the Drachma it will need to print a
lot them and hugely devalue them in order
to pay off its debt.
www.ProfitableTradingTips.com
14. That assumes that anyone will want to
accept them.
A stock trading strategy at this time needs to
take into consideration the possible effects
of a Greek deb default, a run on banks across
Europe, collapse of credit from these
banks, recession in Europe, and a global
economic downturn.
www.ProfitableTradingTips.com
15. It turns out that crisis talks in Greece deserve
global attention.
Those holding Greek debt bonds are in a
funk and have been for a couple of years.
Bank stocks in Europe may be hit badly if
crisis talks in Greece fail.
www.ProfitableTradingTips.com
16. Then, will US bank stocks fall as well?
Factor in the JPMorgan loss of $2 Billion in
six weeks with credit default swaps and you
have an argument to short bank stocks or
buy puts on the same stocks.
www.ProfitableTradingTips.com
17. Buying options may well be the best choice
for when trading a down market it is not
always clear how far things will fall before
they turn around.
This may well be the situation if the crisis
talks in Greece do not bear fruit and soon.
www.ProfitableTradingTips.com
18. For more insights and useful
information regarding
stock, options, commodities, and
futures trading visit
