Money managers appear to have been caught flat-footed on the Greek referndum vote against austerity bailout packages. Many Greeks say there were voting against draconian measures for their economy, but outsiders view the no vote as the exit ramp for Greek participation in the euro. Here’s what money managers are saying:
The market right now hasn’t priced in a potential ‘no’ vote,” said David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc., which oversees $815 billion. “If we get one, we’re going to see another round of downside volatility in excess of what we saw on Monday. The move would be more violent.”
Pioneer, which manages €226.3 billion ($251.4 billion) of assets, has cut back holdings of Spanish and Italian bonds and stocks to protect its portfolios from any potential selloff after the Greek vote. Assets in those highly indebted countries have been vulnerable in the past to fears that a Greek departure from the eurozone could foreshadow a wider splintering of the currency bloc.
But it could have it’s upsides, as Zero Hedge deviously suggests:
With nearly 60% of the Greek refrendum vote counted, and the No’s leading by a landslide 61%, it is clear that the Troika’s gambit failed, unless as Goldman wrote and we first noted, it was the ECB’s intention to force a Grexit all along, thus permitting the ECB to engage in more QE: QE which would in Goldman’s estimation, push the EURUSD down 7 big figures and further toward parity, sending global stocks soaring in one last central bank-inspired hurrah.
Photo: alkis via Flickr.