China market crash and Greece exit
The Chinese market was down 6.5% today, which is a very big move for any overall market. There’s a variety of reasons including the usual ones of slower growth, but there seems to be some tightening of requirements for margin etc.
There is obviously something brewing in the Chines markets which we in the US are not paying a lot of attention. Over the last 10 days, the markets were up 14%. Such large volatile moves in both directions generally signifies some underlying issues.
On the Greece front, its looking more and more unlikely that Greece will be able to meet its June loan/interest payments to the IMF to the tune of 1.5 Billion Euros. As Mohamed el-Erian puts it, the chances of a Greek exit is now 60%.
This will have short term impact on the US markets, and with the VIX at 13, its time to think of some protection. Watch the video below for details.