If the Greek stock market, bond market and GDP disappeared

But there are important distinctions to be drawn between the current impasse and previous ones. If Greek equities, Greek bonds and Greek GDP disappeared, it would certainly be a tragedy, but not of epic and globally destructive proportions.

And it is more likely that Greece will default precisely because it is now bearable.

It is bearable because the IMF and the European Central Bank now own pretty much every bond on which the Greek government can default. There other holders, but not many of them. By now, each knows the risks.

It is bearable because, while Europe’s equity markets as a whole amount to EUR €10 trillion, our broad-based equity index for the region, the S&P Greece BMI, comprises just 39 stocks with a combined free-float market capitalization of EUR €19.7 billion – about two one-thousandths of the former.

It is bearable because the GDP of Greece is now less than 1.5% of Europe’s – an amount otherwise sufficient to distinguish a great quarter of growth from a one of mild disappointment.

Today’s QOTD is from Tim Edwards, the senior director of index investment strategy at SPDJI. It puts the risks in perspective as the Greece situation bumps into yet another “do or die” deadline at two minutes to midnight.

Are there contagion risks? Sure. But if you’re a government or a financial institution and you haven’t spent the last five years preparing for and mitigating the risks of Greece, you’re probably an asshole and you deserve to go down for the count. Greece is like a black swan that lives next door and waves hello every morning from the driveway.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. Tips commented on Jan 15

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2015/06/04/if-the-greek-stock-market-bond-market-and-gdp-disappeared/ […]

  2. rbc sign in online banking commented on Jan 26

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2015/06/04/if-the-greek-stock-market-bond-market-and-gdp-disappeared/ […]