Citi Sees Greek Exit As Soon As September


As the corporate media continues to assure no crisis is on the horizon CITI joins the world’s top investor’s in betting on a Greek exit and Euro collapse.

Citi Sees Greek Exit As Soon As September
Posted by Alexander Higgins – August 22, 2012 at 4:12 pm – Permalink – Source via Alexander Higgins Blog
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As the corporate media continues to assure no crisis is on the horizon CITI joins the world’s top investor’s in betting on a Greek exit and Euro collapse.

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“Prolonged economic weakness will persist – especially in the peripheral countries – with further periods of intense financial market stress” is how Citi’s Willem Buiter’s economics team sees the future in Europe. While they continue to believe that the probability of a Greece exit from the Euro is around 90% in the next 12-18 months; but more critically it is increasingly likely in the next six months – conceivably as soon as September/October depending on the TROIKA report. There is a crucial series of meetings and events in coming weeks and while they believe that the ECB’s conditional bond-buying (and ESM/EFSF) may help avoid a ‘Lehman moment’ around the GRExit, they believe that there will still be considerably capital flight out of periphery assets should it occur. The reason being simply that even if funding costs were reduced, the current mix of fiscal austerity and supply-side reform will not return any periphery country to a sustainable fiscal path in coming years.

Categories: ECONOMY

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