Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Greek Debt Crisis Investor Opportunity That's Being Missed

Interest-Rates / Eurozone Debt Crisis Jun 23, 2015 - 11:46 AM GMT

By: ...

Interest-Rates Peter Krauth writes: As Greece approaches its next payment deadline, the rhetoric and the stakes are boiling over.

The IMF recently quit negotiations in Brussels, saying it had reached a stalemate.

Then Greek Prime Minister Tsipras said the IMF had "criminal responsibility" for his country's debt crisis.

With a looming deadline, now Russia has stepped to the fore, with overtures of financial aid.

It might be too late – but with a Grexit appearing closer than ever, the markets remain calm.

Here's why, and how to profit.

This Major Player Will Impact the Crisis

Greece's next loan installment is a €1.5 billion payment due to the IMF by the end of this month. By most accounts, the country can't make that payment without its next bailout tranche.

According to the IMF's Lagarde, Greece faces default if it doesn't meet its June 30 payment. Yet Greek negotiators are playing a game of chicken, unwilling to accede to further austerity measures in exchange for more help. Meanwhile, Greek banks are nearing failure, with billions of euros fleeing every week.

The Greek Parliament even declared its country's bailout debt "illegal, illegitimate and odious." Despite all this, European stocks indices have held up, and the euro has gained 8% versus the U.S. dollar since mid-March.

Now, Russia is back in the picture.

In February we discussed Moscow's "friendly" disposition towards Greece and its new Syriza administration.

But the relationship is complex, and historical ties between the nations run deep. Most recently, Russia has become reliant on Greece for its strategic natural gas pipeline that will cut through Turkey, then into Greece, to eventually deliver into Europe. It's a multi-billion euro deal that has Greece salivating.

On June 19, Tsipras called Russia one of Greece's most important partners while speaking at the St. Petersburg International Economic Forum, where a deal was signed to extend the pipeline into Greece.

And yet EU foreign ministers, including Greece's, have just voted to extend sanctions against Russia.

Why wouldn't Greece oppose? Doesn't it need Russian bailout help?

Perhaps Russia needs Greece more than the reverse, because supplying gas into Europe is not just lucrative, but a very long-term deal. Consider also the timing.

Greece is almost certainly playing its cards very closely, remaining loyal to Brussels in exchange for some debt relief, or other significant concessions. That could mean the best of both worlds: Russian money flowing in and European debt discounts.

On Monday, Germany's DAX and France's CAC40 indices were up 3.85%, while the Athens Stock Exchange General Index surged 9%, as news broke that new proposals from Greece might lead to an agreement. Odds of yet another eleventh-hour deal have climbed dramatically.

Some 80% of Greeks prefer remaining in the Eurozone and are willing to cave to a raw deal even as Syriza reneges on "inviolable" campaign promises.

Pretty much everyone agrees that should Greece leave, it will be messy. Meanwhile, other PIIGS nation members (which include – in addition to Greece – Portugal, Italy, Ireland, and Spain) might look favorably on the eventual outcome if Greece were to go it alone and land on its feet. That kind of threat to the union's integrity and viability is a thought Germany likely isn't entertaining.

I'm Bullish and Here's Why

My view is that the odds are rather good Greece isn't going anywhere. Improving consumer confidence and market strength in Europe seem to back that view.

The backdrop of the ECB's mega-QE program will continue to support high-quality corporate debt. That's why I recommended the SPDR Barclays International Corporate Bond ETF (NYSE: IBND) back in March.

This ETF's holdings consist of 52% corporate finance, 40% corporate industrial, and 8% utilities. In terms of quality, 27% of bonds are rated Baa, 53% are rated A, 19% are rated Aa, and 1% is Aaa. Eighty-three percent of these bonds mature anywhere from one through 10 years, with an average maturity of 5.65 years.

Geographically, 76% of its holdings are European, 22% are American, and 2% includes issues from Japan, Hong Kong, Mexico, India, and Israel.

The rationale of looking to high-quality corporate bonds whose issuers should do well regardless of Europe's direction seems to be bearing fruit. Consider, too, that when I recommended IBND, major European multinationals like Royal Dutch Shell Plc. (NYSE ADR: RDS.A), Nestle SA (VTX: NESN), Novartis AG (NYSE ADR: NVS), and Sanofi SA (NYSE ADR: SNY) had recently seen their borrowing costs head into negative territory.

Since then, IBND has gained nearly 2% while providing an annual yield of 1.57% – not gangbusters, but that's not the goal. Remember, these are higher-quality corporates, with over 60% rated A or better.

I think as the Grexit can once again gets kicked down the road, the euro, and Europe's stocks and bonds, will continue to gain favor.

My advice stands. Look for IBND to work its way back up to its previous high of $38.05 in the process – still a 19% gain from here. And continue to use two stops: a hard stop at $30.34 (its recent closing low) and a 7% trailing stop, which makes sense due to IBND's lack of volatility.

Greece's and other PIIGS countries' longer-term futures may one day be outside of the current union, but that's likely to be a considerable way off.

In the meantime, Greece is going nowhere. And that spells opportunity.

Source :

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules