ECB Considers how to Prevent the Greek Exit


Author Larry Berman

Posted: 30 May 2012 re-posted from etfcm

With the ECB considering options to keep the Grexit risk off the table by way of Eurobonds and swap lines, the markets should be pacified in the short run, but we will not know how easy or toxic the Grexit might be until the June 17th election and the Fed’s response, if any, until June 20th. So bounces for now should be limited to the 1340-1365 range, though a good European band-aid could surprisingly calm the markets and give them a much bigger lift than we think is likely.

With China slowing hard and commodity prices confirming as much, there are no shortages of things for investors to be anxious about. Thankfully, for now, most are not concerned with how toxic the US debt picture is and to what degree 2013 will usher in a forced recession due to a need to balance the budget and avoid another debt downgrade—but we digress, not many are looking at that right now. Right now, all are concerned with the bank runs that are spreading in Europe.

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