Several hedge funds are predicting that the European debt crisis, currently centered in Greece, will spread to Portugal, Spain and Italy and are executing that investment thesis in different ways. CQS UK is approaching it not by shorting government debt or buying credit default swaps but by trading corporate debt of discretionary spending such as mobile phone companies or of government subsidized enterprises such as utilities. Marathon Asset Management is expecting the sovereign debt and financial institutions of Portugal, Ireland, Spain, the United Kingdom and Italy to run into trouble. The banks are overleveraged and will have to be nationalized. Groveland Capital is buying credit default swaps on Italian and Spanish government bonds because they are a better value than Portugal and Greece at this time. It's too late to make money on them.
The source for this article is here.
No comments:
Post a Comment