Hedging PIIGS Risk with ETFs

Fri, 01/29/2010 - 01:44 EDT - Seeking Alpha

Tom Schumacher submits:Acronyms for blocs of countries are all the rage these days: BRIC, MAVENS, now PIIGS (Portugal, Italy, Ireland, Greece, and Spain). As the BRICs and MAVENS were created to group strong growth countries into an investable group, the PIIGS are the polar opposite: countries on the brink of disaster. We didn't coin the acronym "PIIGS", but we are the first out with a comprehensive way to "play" it.Europe's woes, particularly those in Greece have been well documented, as debt ratios and budget deficits are climbing. Sovereign risk is rising. Portugal just yesterday announced a budget deficit that was 9.3% of GDP vs. previous estimates of 8%. S&P and Moody's have downgraded or slapped negative watches on Spain, Greece, Portugal debt in recent weeks with Moody's going so far as to warn that Greece and Portugal's economies may suffer a "slow death." The IMF is estimating that Italian public debt will reach 120% of GDP next year. Ireland was forced to raise taxes and slash $3.6 billion government spending to help contain their annual budget deficit. In addition to a large budget deficit, Spain is battling the highest unemployment rate in Developed Europe and a Real Estate implosion worse than that of the United States.Complete Story »

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First BRICS. Then PIIGs. Now, The Formidable 5.
In recent years, economists have had a thing about easily pronounceable acronyms for groups of countries in similar situations. It started with the fast-growing emerging market BRICs—Brazil, Russia, India, China, and South Africa—and continued with the heavily indebted euro-area group known as PIIGS—Portugal, Italy, Ireland, Greece, and Spain. Last year, when investors began worrying about Brazil, India, Indonesia, Turkey, and South Africa, an apt acronym didn’t jump to mind. So they got a more prosaic appellation: “the Fragile Five.”
Greece Is the Word--But What About the Economic Forecast?
My main focus on the Greek crisis is how it will impact the global economy, and especially the United States, but nobody covering this issue can avoid the morality lessons. First, Greece borrowed too much. That’s bad. Second, Greece cooked its books to conceal the magnitude of its deficit spending. That, too, is bad. Third, other European countries knew that Greece was doing this, but ignored it so as not to embarrass them or weaken the European Monetary Union. That may have been the worst error of them all.
Eurozone economy doing better than we thought, with even Greece showing signs of revival
The euro-area economy grew faster than analysts forecast in the third quarter as Germany and France rebounded and Greece showed some signs of revival. Gross domestic product increased 0.2% from the previous period, when it rose 0.1%, Eurostat, the European Union’s statistics office in Luxembourg, said Friday. That’s more than the median of 39 estimates in a Bloomberg News survey for 0.1%.
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By lambert strether of Corrente.
The Attack Of The PIIGS
By Romano Bastianpillai:Economists refer to the debt-burdened European nations collectively as PIIGS. PIIGS is an acronym:P: PortugalI: IrelandI: ItalyG: GreeceS: Spain Why PIIGS?
Banco Santander: Tantalizing Value Or High-Risk Investing?
By Caiman Valores:The effects of the European sovereign debt crisis have pushed the European banking industry into crisis with investors fleeing the sector in droves fearful of sovereign debt defaults and high risk loan portfolios. It has also had significant impact on many European economies, particularly those with high government debt leading to a eurozone wide economic slowdown, which has been most sharply felt in those countries on the periphery: Portugal, Ireland, Italy, Greece and Spain (PIIGS).
Bank recapitalization an inadequate panacea for eurozone’s woes
Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.This post is a guest contribution by Asha Bangalore, vice president and economist at The Northern Trust Company.
Highlighting the PIIGS ETFs
Michael Johnston submits:While reports of jobless rates in the U.S. or the pace of inflation in China occasionally pop to the top of the headlines, the last several months have seen the spotlight focused on European markets as the continent continues to battle a debt crisis that has threatened to derail a fragile economic recovery. While the fiscal woes have been felt throughout Europe, the impact has not been felt evenly.
What Liberia Has That Ireland Doesn't
Elliott R. Morss submits:Introduction The International Monetary Fund is in Ireland working with the European Central Bank to help Ireland get through its financial crisis. This follows negotiations for bailout packages in Greece and Spain. These efforts remind me of standby missions I took for the IMF a while back. What is a Standby?
Ireland Bailout Cheer Is Dangerously Premature. Here's How to Play Markets Accordingly
Cliff Wachtel submits: Asian stock markets closed mostly higher, and thus far today European indices are printing unanimously and appropriately in the green in the opening hours, as are commodities and risk currencies ( by ‘risk’ currency forex, traders refer to a currency that usually rises with stocks and other risk assets, the label has no connection to their stability). The optimism is dangerously premature, primarily because the EU i

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