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Posted by on Jul 6, 2015 in Market Insight, Treesdale

Europe After The Greek “NO” Vote…

Europe After The Greek “NO” Vote…

By Dennis Rhee, managing member of Treesdale Partners, and portfolio manager of the AdvisorShares Gartman Gold/Euro ETF (GEUR) and AdvisorShares Gartman Gold/Yen ETF (GYEN)

 
In an unanticipated result, the Greeks showed a strong rejection of the bailout plan primarily due to the pension cuts that were on the table. The Greek Prime Minister Alexis Tsipras gained a huge vote of confidence by his constituency and will be expected to negotiate a better bailout package.

The initial capital markets response has been global stocks down, Euro lower, Yen and US dollar stronger. European bond yields are wider and this will be the impetus for the ECB to act expediently as this is counter to the master plan of lowering rates with quantitative easing. Ultimately Germany needs Greece and other weak EU countries to keep the Euro weaker.   Imagine if the Deutschmark was trading.   Germany would be in a similar situation as Switzerland with an inflated currency and all the problems that come along with it.   Along with the fear of contagion, we feel that a deal will be worked out and Greece will stay in the Euro.

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.

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