There is a 65 percent chance euro zone countries will allow their currency to devalue or dissolve and everyone does their own thing, says Adam Fisher, Co-founder, CommonWealth Opportunity Capital, a Los Angeles Hedge Fund.
Europe spent $140 billion aiding Greece, a figure that could have been a lot smaller had the rescue come months ago.
Plus, other countries such as Spain and Portugal are going to come asking for help as well, Fisher says.
“We're horribly bearish about the options and likely outcomes,” Fisher tells Barron’s.
“We've added further short positions in the euro, and added U.S. Treasuries and gold.”
For Fisher, there are three types of markets today. Those like the United States and the United Kingdom, which have debt problems but ways to get out of them and are improving.
There are emerging markets, which are enjoying a flow of investment money thanks to scares in the industrialized world
And then there are Japan and Europe, where debt problems are so bad that they overshadow anything good that can happen.
“Both have reached the end of their loosening cycle, and euro-zone Europeans can't even print debt in their own country's currency,” Fisher says, adding he likes companies like BMW, Daimler and Siemens, which would benefit from a devalued euro.
Greece recently tapped a first tranche of $6.9 billion from an International Monetary Fund, making it the first euro zone country to resort to the multilateral lending institution.
“Greece has accessed the sum without any problems, everything was done in close cooperation with the IMF. Everything is under control,” an anonymous top official from the finance ministry tells the AFP.
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