Welcome to the inaugural edition of our blog at optiontiger.com ! We’re living in interesting as well as uncertain times. The global macroeconomic theme plays a key role in what we do here at optiontiger, so it’s a fitting coincidence that we’re starting off with that theme. There is a lot going on in the world right now. As we write this, France has elected the first socialist president in 25 years and the situation in Greece may spiral out of control. In fact, Citigroup just raised the odds of a Greek exit from the Euro to between 50 and 75% in the next 1 to 2 years. A quick snippet from Bloomberg –
“Two months after forcing through the biggest-ever sovereign bond restructuring, Greece once again faces the prospect of becoming the first developed nation to default on its debt.
The government taking office after this weekend’s election has 30 days to decide whether to make today’s interest payment on 20 billion yen ($250 million) of 4.5 percent notes maturing in 2016, or default. Then, by May 15, officials must decide if they’re going to repay the 436 million euros ($555 million) due on a floating-rate note issued a decade ago.”
If the Greek government pays these amounts, then the newly elected officials would have caved in on the get-go. If they don’t pay – well, the consequences are dire…French citizens decided at the voting booths that the Merk-ozy alliance is not palatable any more, and neither is austerity. The vote was as much a vote against Angela Merkel of Germany as it was against Nicolas Sarkozy. And just like Greece, the new French Government will probably be in no mood to continue the Band-Aid solutions that Merkel and Sarkozy have been instituting for the last 3 years. And without France by its side, can Germany really pull the Eurozone out of its mess by itself ? Maybe it can, but does it really want to ? And how will German citizens react to the new realities coming out France ? They’re already tired of bailing out the peripheral nations, that’s for sure. But barely a day has gone by since the French elections, and the rift between Germany and France is already beginning to show. (L.A. Times article). One thing is certain – Europe may be taking a dangerous turn into uncharted and uncertain territory.
At optiontiger, one of our guiding principles is to take a realistic view on where the financial world is today, and how this may impact the financial situation of everyday folks. This does not mean we are pessimistic about the future – in fact, quite the contrary. Strictly speaking from an individual’s financial perspective, times of turmoil can be times of big opportunity. While we wish for everything to work out well, let’s face it – very often they just don’t. And the European situation has the potential to throw the financial world into another chaos, the memories of which are still very fresh (or at least they should be). As an individual investor, its time to be vigilant – and take steps to protect portfolios. Better yet, we should profit from volatility, should it be upon us this year or next. And that’s precisely what we teach at optiontiger. Once again, Welcome to optiontiger.com.
Trade with knowledge..Trade with confidence !!