Regan: Eurozone “Will Not Survive” Greece Contagion

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Trish Regan recently joined FOX Business Network after much success at Bloomberg as the anchor of its closing bell show, and is now the host of The Intelligence Report, which airs on FBN every day at 2 p.m. ET.

fbn trish regan

Source: Fox

FOX Business Network anchor Trish Regan

She’s got tons of experience covering Wall Street, asking hard questions of top executives and providing intelligent perspective on the markets, even when the going is complicated.

And because “complicated” barely begins to sum up the situation for investors right now, what with Greece’s debt crisis and a crash in China, I decided to catch up with Trish and get her take on where we are and where we are headed.

Her outlook is pretty grim in regards to Greece — and the entirety of Europe, as a matter of fact.

In her assessment, the eurozone is a “failed experiment” that “will not survive.”

Here’s Trish Regan’s take, in her own words:

Q: A lot of people are speculating about Greece right now. Isn’t the uncertainty the problem, more than a clear idea that we know where this will end with the return of the drachma or what have you?

A: Yes. Uncertainty is the issue. There’s no rulebook for this. No one, amazingly, ever planned for a country to leave the eurozone. The concern is that if Greece goes, then others may follow. In addition, if you’re Spain — and you see that Greece just cut a better deal on its debt — what incentive do you have to rein in spending? The eurozone is a failed experiment. You can’t have an economic union without a political union.

Q: So in your estimation, do you think Greece, Germany, the IMF and the lot will get past the politics and brinksmanship of this and ever be able to craft a sustainable solution, or is it just too messy to reach a compromise everyone can live with at this point?

A: I think they may come up with another Band-Aid solution. We’ve had plenty of those over the last five years. But, ultimately, the eurozone will not survive.

Q: At least Greece isn’t a banana republic. It has an educated population and decent infrastructure, among other things, that many frontier and emerging markets lack. Will that help the country weather what comes?

A: It should. However, the right policies need to be put in place to help the country grow. Without a solid economy, Greece becomes a political risk. Economic uncertainty breeds political uncertainty, and Europe may find itself having to deal with a Greece that is far closer to Putin than the Europeans would like.

Q: We’ve been talking about a Grexit for about five years now. Should we really be surprised if it comes to that?

A: We shouldn’t be. Investors should be prepared. The problem is, they never really are. Contagion risk is a real concern.

Q: Do you really think a bunch of institutional investors are overweight in Greece and will get burned, or has the smart money already made its preparations for this moment?

A: Most banks have gotten out of the business of lending to Greece. Smartly so. But, there is exposure to Italian, Portuguese and Italian banks, and therein lies the problem.

Q: I personally have serious concerns about China that dwarf whatever risks Greece is injecting into the global financial markets. What do you think? If not China, is there some other issue that you see as more disruptive than Greece that should be getting more attention?

A: China matters to us in terms of trade, so you’re right to be worried about its influence on our economy. That’s a bubble that will, at some point, burst. However, as long as it doesn’t turn into a banking and debt crisis, I’m hopeful we can manage it. When bubbles burst (think the Nasdaq bubble in 2000) they’re manageable. A debt crisis on the other hand is systemic and more challenging to our economy.

Check out Trish Regan on “The Intelligence Report” every day at 2 p.m. EST on the FOX Business Network for more of her unique perspectives on Greece … and everything else.

Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/07/trish-regan-eurozone-greece/.

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