{"id":442,"date":"2010-06-17T11:39:00","date_gmt":"2010-06-17T15:39:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=442"},"modified":"2018-08-18T17:47:36","modified_gmt":"2018-08-18T21:47:36","slug":"fears-of-european-crisis-way-overblown","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/06\/17\/fears-of-european-crisis-way-overblown\/","title":{"rendered":"Fears of European crisis way overblown"},"content":{"rendered":"

Good morning everyone!<\/span><\/p>\n

For today’s post I wanted to highlight for you why I feel that current investor fears about a collapse of the European economy are way overblown.<\/span><\/p>\n

As far as\u00a0I can tell most of the fears are sourced in a fear that Spain will be the next Greece.\u00a0 The market rumor mill which is so powerful and so silly is full of news that a Spanish official has suggested that Spain is negotiating for a $335 billion credit line with the IMF.\u00a0 What is unclear is why Spain would be doing this since it has access to more capital from the emergency bailout funds promised by the EU itself.\u00a0 Hmmm<\/span>.<\/span><\/p>\n

Let’s compare and contrast Greece and Spain…<\/span><\/p>\n

***<\/span><\/p>\n

Greek banks are in trouble both domestically and internationally.\u00a0 This is because Greek banks lent huge amounts of capital to fellow Balkan countries during the real estate bubble.\u00a0 So Greek banks are exposed not just to the decline in property values in Greece, but also countries like Macedonia, Serbia, etc.<\/span><\/p>\n

Spanish lending was done overwhelmingly in Spain alone.<\/span><\/p>\n

***<\/span>
\nGreece’s public debt\u00a0is one of the highes<\/span>t in the world coming in at a whopping 120% of its Gross Domestic Product.<\/span><\/p>\n

Spain’s public debt is only 52% of GDP.<\/span><\/p>\n

***<\/span>
\nGreece’s willingness to face the fire of their lies about their budget deficit and debt problems came only after embarrassing discoveries and realizations by others.\u00a0 Even in the face of a Super Crisis unfolding the nation was reluctant to enact austerity measures to manage their own financial house.<\/span><\/p>\n

Spain is confronting its economic problems in an upfront, proactive manner.\u00a0 A powerful example of this is that Spain has announced that it is undergoing vigorous financial stress tests of its banks and that it will soon reveal the results of those tests.<\/span><\/p>\n

***<\/span>
\nGreece has no strong private financial institutions.<\/span><\/p>\n

Spain has both Banco<\/span> Santander<\/span> and BBVA<\/span>.\u00a0 Both of these institutions are considered among the best in the world.\u00a0 The strength of these banks will be obvious once any Spanish bank fails and they swoop in and buy the assets of their collapsed competitors.\u00a0 That vulture capitalist behavior will make Santander<\/span> and BBVA<\/span> more solvent.<\/span><\/p>\n

*****<\/span><\/p>\n

It’s not that Spain doesn’t have problems to worry about – because it does – it’s that Spain is soooo<\/span> far away from being “the next Greece” that it is practically laughable.\u00a0 How can you laugh all the way to the bank?<\/span><\/p>\n

Any weakness in financial markets attributed to fears about Spain should be seen as buying opportunities.\u00a0 One of the easy ways to make money as an investor is to recognize when there is disconnect between financial market pricing and reality.\u00a0 Reality says that everything should be fine.\u00a0 Financial market performance does not reflect that reality.<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning everyone! For today’s post I wanted to highlight for you why I feel that current investor fears about a collapse of the European economy are way overblown. As far as\u00a0I can tell most of the fears are sourced in a fear that Spain will be the next Greece.\u00a0 The market rumor mill which […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3,15],"tags":[],"class_list":["post-442","post","type-post","status-publish","format-standard","hentry","category-the-blog","category-predictions"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=442"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/442\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}