Greece: Banks and Hedge Funds must watch out

The present crisis in and about Greece may look like a god-sent opportunity to make money but banks and hedge funds must be careful not to take too high a profile. Speculation against the Euro and Greece may well backfire if it turbo-charges downward pressure on the Euro and Greek bonds. The days when speculation was a cottage industry and could be ignored are long a thing of the past. Speculative moves do not reflect reality but they actually CREATE reality (a thankful nod to George Soros' theory of reflexifity). So this is not a harmless crap game but the lives of millions of citizens are at stake - and they will not tolerate for ever that a few make millions on the back of ordinary working people. Recent criticism (James Rickards in last week's Financial Times and today's Neue Zuercher Zeitung) pointed the finger at Goldman Sachs. But its competitors should not gloat but may well find themselves in the firing line as well. The New York Times points out that the same investment banks that now point the finger at Greek profligacy when they issue their research reports were more than willing to lead the country deeper into the debt trap. Can you really have it both ways? Even with the help of God?