Financial Times
December 4, 2011
The euro will survive the current crisis, but Greece and possibly Portugal will later leave the currency union in an orderly fashion, according to Kathleen Gaffney, who manages $80bn in bonds for Loomis Sayles.
Since spring this year, Ms Gaffney has been buying government bonds from the peripheral eurozone countries, such as Greece and Ireland, in the expectation that core members of the single currency will step in to avert a break-up of the union.
“The experience of 2008 has everyone sitting on tenterhooks wondering is it going to be the next Lehman,” said Ms Gaffney. “But in the end, if it’s a binary outcome, with either massive [monetary] easing and some inflation, or a global depression.” European leaders will overcome their reluctance and step in, she argued.
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