Sunday, June 28, 2015

Russia ....Greece Gets is Strength From where????


The time has come when the world history is about to be written. The Greece banks are on the verge of collapse and it’s true that only austerity would no resolve the problem of the Euro countries. Don’t forget that France, Germany, Spain, Portugal and even Ireland all are there in the line where default and extension deadlines would hot the shore. Indian markets and its players have been saying repeatedly that they have already discounted the Greece matter. Well that’s easier say but when windup of capital start happening every one run away.

Today people in Greece as on 28th June 2015 are just simply withdrawing all their savings and money from the Bank ATM as they don’t want to have their savings to be kept their. Banks are getting liquidated and the situation is turning out to be worst. Shortfall of capital is going to pull the trigger of huge redemption of capital across the globe. But why Greece is not accepting the terms which will save the economy. I am not going into the old discussion of its macro numbers. Well as I am an economist I am also journalist and being that I find Greece has got immense time to plan for its economy right over the last 4 months. The important question over here is that what and forms where the Greece got its strength to refuse and remain intact to its own proposal despite of so many pressure and meetings.

Russia and China is backing Greece and US already fears the same. It’s a political rift which is going happen and they are already in the cards. The newly elected governments of Greece have been talks with Russia and China to get funds and exit euro. If you remember that Cyprus has already caused a political storm by offering to expand Russian access to its ports and airfields including military facilities.  China and Russia has huge foreign reserves and both the country is in the shopping spree over the last couple of years. Greece hasn’t outright asked Russia for a loan, but Russian FINANCE Minister Anton Siluanov has already a said in Jan and in Feb that if Greece approaches them they will help out taking care all the bilateral trade agreements . Russia has been chasing Greece for a long time. State-owned Russian Railways and Gazprom have been eyeing stakes in Greek assets. Russian Railways has held talks with TrainOSE, Greece’s state-owned passenger and cargo rail operator. In 2013, Gazprom made a €900 million bid for Greece’s state gas company DEPA, but backed out of negotiations at the last minute, citing concerns over the company’s financial stability. Russian INVESTMENT in Greek railways is estimated at up to $3 billion per year.

Even Russian President Vladimir Putin has said that Russia would be willing to supply loans to Greece for major infrastructure and transport works. Russia would be using its oil to be sold and Greece and other European countries. This is just the beginning of Col War between the developed economies. Russia would benefit more by providing aid to the Greece as they will get access to the European economy and slowly other countries would also exit the Euro in the same line creating a history in the political and economics.  Now I hope that everyone understands clearly about from where Greece gets its strength to fight and exit the Euro.

 If Indian markets have discounted the present Greece story then I would like to draw the attention that when an equity market keeps on discounting bad news then the risk level of trade becomes higher. Further we need to the level to which the Greece bailout matters have been discounted. Did Indian markets have discounted the catastrophic affect of euro exit by many more countries? Now think and get back to your broker, fund manager, analyst to get the precise clear map of the same. We Indians understand less of risk and return and more believe is on news of the herd community of investors. In 2008 Jan we discounted many bad news and the same happened until Lehman brothers came to close. What I want to say is measure your risk and keep an eye on the level of bad news being discounted by the market. Whenever market falls it falls in disguise. Know your risk and returns.

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