Market Musings: #Grexit

  I’ve done the same routine I’ve done for the last two week’s. I went to StreetEye to look at the top articles for the day and similar to the last two week’s Greece is dominating the headlines. Actually, I realized I knew I was going to write about Greece this week after it started to look like the deal that I wrote about last week was called off. The Greek exit, or Grexit, from the European Union has started and nobody knows what’s going to happen. That’s why this story has dominated the headlines since 2010. I was talking with a college the other day and I mentioned how I’ve felt like I’ve been talking to about the Greek default for almost my entire career. It’s about three years shy but it makes up the majority of my career.

Greece is going to exit the European Union and there are more opinions then you can count. I’ve read two of the articles on StreetEye dealing with Greece. I read the Reformed Broker’s, “Some stuff you should know about Greece before you lose your s***,” and Behavioral Macro blog’s,”Greece It’s Time (And It’s Going To Be Okay).” They both had the same opinion, people should quite losing their minds about Greece. Yes, a country hasn’t left the European Union before but Greece has defaulted almost more than any other country and the markets are almost desensitized to this announcement because they’ve been preparing for this event since 2010. On top of the impact of this impact being decreased because it’s kind of priced into the market because many people have been waiting for this event to happen. The world economies are also much stronger than 2010. They are able to take a hit in the global economy even if Greece was a major economy. In relative terms Greece’s economy is a similar size to Atlanta, Georgia.

Once Greece official defaults, it will be interesting because it hasn’t happened, money will be lost and won, and then Greece and the European Union can move on and rebuild.

This maybe an over simplification of this problem it feels like this isn’t a huge surprise. The market knew this was going to happen. Now it can happen and everyone can move on to the next crisis.

Does anyone know of the next crisis? When is the next US Debt Ceiling deadline? This article from The Hill has it occurring in October or November. I can’t wait.