INVESTORS RED ALERT: Greek Default Comes with a 30 Day Grace Period!
The world’s markets including the major U.S. Indices have been in retreat since last Friday, June 12. Down over 250 points!
The Greek Government and their European counterparts don’t appear to be in a position to come to a mutually acceptable agreement. A Greek default on its international debt looks increasingly likely. The politics in Greece actually favor financial suicide in the event that no deal is struck.
Yet, a default by Greece would come with a 30 Day grace period that few on Wall Street are pointing to. That extra 30 days may give both sides enough time to salvage a coherent mutually acceptable compromise deal.
The problem however with this extra 30 day grace period is it will drag on to the 11th hour, come with many emotional swings between hope and despair. These manic swings could seriously disrupt the world’s financial markets, and increase the magnitude of the rallies and selloffs to the point that investors could be hit with a serious case of financial whiplash!
Investors should be extremely careful going forward until the situation becomes clearer.
Unless, calmer heads prevail on both sides this dispute, could result in several 200, 300 even 500 point swings on the Dow Jones Industrial Average in the next few weeks. Investors should keep in mind the historically low volume in the U.S. and European markets in the summer months. This could compound the volatility making this an even hotter and dizzier summer than normal for equity and bond holders around the world.