With the IMF, the ECB, and the European Commission hell bent on bringing Greece to its knees, Yip Ka-hay, a Hong Kong-based former SAC Capital portfolio manager, is currently betting big against the euro and loading up on the yen, Bloomberg reports.
Pointing to the high probability of Greek Prime Minister Alexis Tsipras going for a Grexit rather than kowtow to the troika, Yip, who currently runs his own hedge fund, has taken a somewhat contrarian view compared to the market’s, saying:
“The market is still expecting a last-minute compromise or extension of talks… …(t)he possibility of Greece failing to pay the International Monetary Fund the 1.5 billion euros ($1.7 billion) due June 30 is much higher than what the market is pricing in.”
He’s probably right. Everything surrounding the Greek debt talks right now has reached a new level of insanity. The IMF, historically known to favor debt relief in return for tighter, harder reforms, has instead chosen to raise Greece’s monetary targets and push for more austerity despite recognizing earlier on that the nation’s debt load is completely unsustainable.
The ECB, other than threatening to boot Greece out of the EU, seems to have been pushing for a Greek bank run in its latest report. The European Commission continues to demand for more pension cuts on top of the eight that Greece has done already despite seeing almost half of Greece’s pensioners living below the poverty line,
As the reality of a Grexit grows stronger each passing day, the probability of Yip’s bet being a success grows stronger as well.
Photo credit: Austin Keys via Flickr