Canadian advisors react to Greek vote

Canadian advisors react to Greek vote

Canadian advisors react to Greek vote In a vote Sunday that wasn't all that close the people of Greece may have said no to the referendum question but they effectively voted yes to market volatility – even here in Canada say advisors.

“In the short-term anything can happen,” said Victoria-based Raymond James advisor Chris Raper. But in the long-term, “The European Union and by extension, the euro, strengthens, Now that may take weeks to months but that would be my expectation.”

Raper’s comments mirror those of advisors from one end of the country to the next as they look on the tumult Greece has thrown the European community into.

A no vote to the referendum question, which asked its citizens whether or not it should accept the bailout proposal put forth June 25 by the European Union, European Central Bank and International Monetary Fund, threatens to lead to Greece’s expulsion from the EU.

Still Raper, who is quick to remind WP readers that his views are strictly his own and not those of Raymond James, is convinced the fallout may be minimal in Canada.
He’s cautioning clients not to make a mountain out of the molehill that Greece is economically speaking.

“Greece is 0.3% of the global GDP and 1.3% of the EU GDP,” said Raper. “We can lose that much in the stock market in a day. Three weeks from now nobody will care.”
The bigger problem is whether the events in Greece spread to other parts of Europe.

“That risk is real -- that you get this kind of contagion effect,” said Raper. “But again, we’ve had years to prepare ourselves psychologically for that. This is not like 2011 where equity markets went down 19 per cent.”

That kind of drama simply isn’t in the cards here, he argued.

“There will be no be no surprise, no big market-moving event.”
  • Dan Moore 2015-07-06 1:06:30 PM
    This has not got a lot to do with Greece, leaving the Eurozone, it is the risk contagion to the other EU members that is the issue in my mind. The PIIGS less Greece have a lot bigger portions of their GDP to lose. Germany about 4%.

    This will leave a giant hole for taxpayers of the EU to fill to re-capitialize their banks. And now with the new bailin rules, the bank depositors of these countries take the bath. (Note: we have these bailin rules in Canada as well now).
    And you can be sure that if Troika gives in with a re-structuring via debt forgiveness that the rest of the underwater economies with be lining up as well. The problem is much larger than 1.3% of EU GDP. Its about how to handle the fallout, on a massive scale. This "No" vote from Greece is a game changer.

    On top of that the canary in the coalmine is Russia and China, both with interests in Greece with the new Asia Development bank in the wings to provide funding for Greece in exchange for pipelines, bases etc. Tsipras first phone call was Valdimir Putin.

    And if we have an official default event this will trigger derivitives (insurance contracts) times 100 the debt, of which there is nothing but thin air to back.

    This is far from over and just the very tip of the ice burg. Now is time to excercise caution.

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  • Robert Roby 2015-07-06 4:13:22 PM
    AS the Chinese say:


    Its time to buy!
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