Faber On Europe: Think GERxit Not GRExit

Monday, July 2, 2012
By Paul Martin

by Tyler Durden
ZeroHedge.com
07/02/2012

In line with our views on Europe’s endgame, Marc Faber opined on Bloomberg TV this morning that if he “was running Germany, [he] would have abandoned the eurozone last week”.We suspect that given the lack of real steps forward and no additional exposure (as yet) for Germany that they can hang on a little longer before they reach the final phase of the game-theoretically optimal exit (that Credit Suisse and us share) of a mercantilist GERxit occurring sooner than many think (benefiting from deposit inflows and low-EUR-based high profitability from exports for as long as possible and not a moment longer). The “cosmetic fix” of this latest summit, as Faber calls it, simply does not solve the fundamental problem of over-investment in the euro-zone. He is bottom-fishing in some European equities (though avoiding banks) and is not long the Euro here as he sees the modest rally in risk assets in Europe as merely a reflection of illiquidity and a grossly oversold market reverting on ‘not a total disaster’ though he reminds us early on that “pooling 100 sick banks does not make them healthy.”

The Rest…HERE

Leave a Reply

Support Revolution Radio