How the hell did Greece become the center of the global economy?

(You may need to increase the font size to enhance your reading experience – to do so – hold down Ctrl and press +)Why is Greece so important to the health of the global economy? After all it exports nothing except copious quantities of plaster of Paris replica’s of Romanesque’s trinkets; a bit of olives and that’s all there is to it – in terms of scale, if Greece was the equivalent of the human anatomy; it would probably be one follicle of pubic hair – so what’s the big deal about Greece?

Well to cut right through the crap – Greece is important because some people are actually crazy enough to believe it is the stone that holds up the entire face of a mountain – remove that one stone and what you will probably get is a cascading effect that’s like an avalanche.

Another reason why Greece is seen to be so important to the global economy is summed up this bumper sticker - we live in financial times! To paraphrase, these days when a butterfly flaps its wings somewhere in Times square in NYC, it can very well cause a tornado somewhere off the coast of Alaska – by the same token, even if one country suffers a ding in it’s economy; it can set into motion a cascade of unforseen events that may have devastating consequences (I dont want to go down this road, bc I am tired, but if you want to know more about it, just Google up complexity theory) – the fear of the contagion effect in Europe is very real and that’s why most savvy investors are beginning to ask themselves questions like; if these Europeans can’t even get their act together to put a band aid on a minion state like Greece, what about juggernaut Spain, Portugal and possibly the UK? What if the bough breaks there?

The signs are worrying to say the least – as the continuing uncertainty over Greece’s ability to refinance its heavy debt load coupled with country’s stock market slump will all add up to a double whammy to further pummel the euro to renewed lows.

The long and short of it is this; most investors simply don’t have confidence in the EU to fix Greece. To paraphrase: they believe (real or imagined) most heavy weights in the EU who can really get Greece out of the shit pot i.e Germany and France are simply not genuine and whatever they have to say is just one giant PR campaign designed to prop up the crumbly belief – if the shit hits the fan, the cavalry will come in – they’re not convinced! Neither am I! If there is one thing that perpetuating this mood of malaise, it has to be an utter and complete lack of resolve on the part of the rest of the EU members.

This massive erosion of confidence seems to be like a bottomless pit; not even the recent revision of the Greece budget deficit figures slightly upward from the 12.7 percent of gross domestic product reported for last year managed to put the brakes of investor fears. The news in the street is still sell Greek assets as fast as you can!

This begs the question; is it a good time to invest in Greece? And if you should decide to put park your money in Greece right now where is the best place to put it?

One counter that’s currently on the crosshairs of my periscope is The National Bank of Greece (Nasdaq ticker: NBG)

http://www.google.com/finance?q=NYSE:NBG

There are a few reasons why I like this counter – firstly, most of the sell off is sentiment driven (that’s to say it’s based on the general feeling things are going to get much worse before they get better – this in no way diminishes the book value of NBG, based on my calculations, it’s worth at least double what it’s trading for right now – I could be wrong, have been wrong, so please do your own research) – the way I see it is simple Simon; when things are so bad, it can only get better – besides it’s only a matter of time before the European assistance package gets fleshed out – and much of the delay that we are currently seeing right now is due to the complexity of trying to plug and play, the EU rescue plan in conjunction with the International Monetary Fund package – in simple terms what we have here is a classic case of a man who has a three pin plug in the land of two pin power points.

However, do bear in mind, buying into the Bank of Greece is a long term investment – if you’re not willing to hold it for more than 6 months then I say give it a miss; this is definitely not one of those stocks you can go in and out for a spot of drive by shooting – but then again; you can’t be driving a Ferrari all the time; sometimes it makes far more sense to cruise sedately in Bentley – if I decide to go into NBG – I am betting on a few assumptions – firstly, the € will begin to stabilize and even reclaim lost ground against the dollar – secondly, the haggling over the details as how to save Greece will begin to set in concrete – thirdly Greece will see through a set of agreed structural changes to bring the budget deficit down to 8.7 percent of G.D.P. this year.

Providing 1,2 and 3 hits – NBG is good for the long haul – but remember, it takes balls of steel to buy into NBG – some people believe its currently trading at loose change territory i.e USD$3.00 something - but I am not so sure, it’s hit rock bottom yet – so keep your powder dry;  don’t get trigger happy; my gut feel tells’ it’s best to let her come around a few times before you decide to tug on the shank – let her bleed some more.

Happy Hunting

Darkness 2010 – The Brotherhood Press 2010

WARNING: THERE ARE ONLY CRACKPOTS, LIES AND DISINFORMATION IN THE INTERNET

DISCLOSURE: THE AUTHOR CURRENTLY DOES NOT HAVE ANY POSITION IN NBG