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Tags: Greek | Drama | greece | euro

The Greek Drama: Use It For All It's Worth

By    |   Friday, 18 May 2012 07:19 AM

Here is my opinion on Greece and what the end game will be.

In the past two weeks, the S&P 500 Index has dropped more than 7 percent from its May 1 high because of fear about Greek contagion

I am long-term value investor and these pullbacks will often give me bargain prices on stocks that I enjoy owning for 3 to 5 years.

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The media and every pundit in the world feels the need to comment on Greece.

Since the 2008 financial crash, the investor is subject to a large barrage of worst-case scenarios.

It doesn’t influence me one bit.

Most people ask me, "Why don't they just kick Greece out of the euro, who believes them after all their lies?"

Good question.

This is my opinion — take it for what it’s worth.

The European banks are full of Greek bonds. Obviously if Greece defaults, then the banks will have to raise capital, like we did here in the U.S in 2009.

We solved our banking problems in the U.S., but selling fear is more popular, I am afraid.

In the past, Greek officials promised to reform themselves, the European Union and the IMF gave Greeks money and the contagion danger ended.

However, this time Greek officials keep threatening to leave the euro and want a revised austerity settlement.

I believe that the ECB and IMF are sick of this irresponsible Greek behavior.

I think they are prepared to pay the interest on the bonds but not give Greece another penny for their salaries and their bloated government.

Those trying to gain power in Greece seem intent on playing chicken with the IMF and ECB.

At worst, they figure they will agree at the last moment and they will have what they agreed upon in the first place.

In the meantime, markets all over the world continue to be plagued by all this "noise.”

Editor's Note: Inside the World’s Greatest Retirement Lie
Find Out the Truth, See the Details.

In my opinion, the interest on the Greek debt will get paid to those European banks dumb enough to be holding Greek debt.

The Greeks will realize their bluff is going to be called and will take whatever deal is offered.

Greece isn’t leaving the euro – just not yet, anyhow.

Personally, I wish they would just throw Greece out of the eurozone.

However, this drama will continue to play out.

The media will be spewing doom and gloom.

And wise value investors will continue to grab bargain prices.

Take it for what it’s worth.

About the Author: Bill Spetrino

Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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Friday, 18 May 2012 07:19 AM
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