Commentary Greece
Category: Economic Commentary

Four Reasons to Keep Calm About Greece

Sullivan's Market $ense: A column to help investors gain perspective on today’s market noise

There are four reasons to keep calm about Greece:

  1. 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.
  2. 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.
  3. 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.
  4. 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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