There are four reasons to keep calm about Greece:
- Greece is over 5,000 miles away. Distance makes a difference. Just about anything we need from Greece was shipped a few weeks ago. Most things they need from us were shipped weeks ago.
- The economy of Greece is small. It represents only 0.39% of the world economy. It is bigger than Alabama, but smaller than Georgia. Therefore, some production loss or restraint of trade in Greece will not affect many.
- Greek debt is in strong hands. The debt that Greece is about to default on is mostly owned by the IMF. Total debt sums to about $270 billion and is owned by the IMF, the ECB, Germany, France, Italy and other public entities. Only 17% is in private hands.
- Time has been on our side. Those who must be exposed to Greece and Greek debt have had several years to prepare for a default.
Many have been waiting for a buy opportunity and Greece may provide it, turning tragedy into comedy. Stay tuned. (Source: Bloomberg) Brian B. Sullivan, CFA President & Chief Investment Officer, Regions Investment Management
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