Today’s Judas Goat – Much Ado About Greece

“It’s all just fear-enticement, a fleeting dissonant busk, another media nugget feeding a Judas Goat – those animals they train to associate with the herd and then lead the lambs to the slaughterhouse (read: you and me).”

By Ed Emerson

A hammer-headed blonde news anchorwoman (HBNA) is pitching Greek debt dramas this morning like Nolan Ryan chasing that elusive 8th career no-hitter. It’s all a mash of GDP and global financial impact discussions iced with reveries into how Greece once brought the world a thing called democracy.

She’s the economic pied piper and I’m floating on her “Euro-geddon” medley.

But it’s all just fear-enticement, a fleeting dissonant busk, another media nugget feeding a Judas Goat – those animals they train to associate with the herd and then lead the lambs to the slaughterhouse (read: you and me).

Still, you can’t blame this one entirely on the goat. 

In fact it reminds me of the conversation that took place between Moss (Ed Harris) and Aaronow (Alan Arkin) in the film Glengarry Glen Ross, where Aaronow is accused of being complicit to a planned robbery just because he’d sat with Moss in a beat up Chevrolet in the pouring rain and listened to his plan:     

Moss: In or out. You tell me, you’re out you take the consequences.

Aaronow: I do?

Moss: Yes. (Pause.)

Aaronow: And why is that?

Moss: Because you listened.

The HBNA is working off a script here, albeit admirably, for which she’s probably paid fairly well. But then, like 99% of financial scribblers and commentators out there, she’s also probably trying to pay down her credit card bills just like the majority of her viewers.

And while there’s a dubious logic to only listening to folks who are investment wealthy when you’re talking about creating wealth, Warren Buffett does point out: “Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”

If there’s anything to take away from the Greek drama (read: the people didn’t pay their taxes, so the country didn’t pay its debts, and now Greece is trying to negotiate its way out of settling with its creditors) it’s that Greece’s GDP at circa $250 billion is about the same size as the state of Connecticut in America – in global economic terms that’s like a finger-flick of water in a jacuzzi bathtub.

The numbers

The cap-weighted Athens Stock Exchange (ASE) index shows a drop from a circa 1,300 high in June 2014 to its current level of about 750. 

The logic

Don’t fooled into thinking there’s any direct relationship between a country’s economic performance and its stock market performance. There isn’t.

What is important, over ver the long term is the price you pay; the higher the starting price-earnings ratio when you buy a market, the lower the return over the next 5, 10 or even 20 years.

The reality

Greece’s citizens are now feeling the austerity pinch. But from an overall investment perspective, this won’t crash the Euro or create global chaos. It’s much ado about olives and taramasalata, and not much else.  

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