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Harris Financial Group Managing Partner Jamie Cox explains why he is concerned over the aftershock s of a Greek default.
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In markets but obviously it is all about Greece there's been a huge uptick in the violence -- Athens protesters police are clashing over cuts.
In front of the Greek parliament building had a real vote on the new round of austerity measures those need to come through isn't Green -- Walt.
A forgone conclusion I wanna bring in Jamie into the conversation Jamie that's the question is it just a foregone conclusion they're gonna be -- that's gonna.
I think so Sheryl I mean in a general consensus and I think you have to happen.
The question is what happens after the default I mean that's what really the rule really determine what happens next I mean if we did Greece default is not a big deal by itself.
But when the transfer effects on -- the other you know more important countries like Italy.
France and Germany that's where you have to really set the firewalls to make sure that the default in Greece does not.
Affect the banking system and and transfer around the world you don't want this big deflation -- that generally occurs when you have debt to -- And that's what I think it's gonna happen but what I think the Europeans are trying to do is create the firewall to make sure -- what -- and what happens agree stays in Greece because moderate but.
President but is not Jamie that's the problem hearing on gold Merkel coming out yesterday saying.
That Europe is not going to solve the crisis than one summit we just found out about an hour ago.
That French president Nicholas Sarkozy getting on a plane He says that he's got a good jump start these talks.
-- Merkel saying it's gonna take time but the markets don't seem to have much time -- -- much of the Greeks have much more time left.
Well -- -- the thing to think about is you know we're we're talking about a socialist area.
These people are gonna get it together it might take a -- while they don't happen that -- these guys don't do things in the -- friend that Americans would like but they'll get it done because you know the socialist world.
They'll get it done there's no question about it we're not gonna like the timetable but it will happen because there's too much at stake for them.
And I think that is just a matter of days before we start to see real headlines take for example yesterday.
You had a guardian report talking about some type of you know ES FF leveraging and all the so the market takes off the mean we're just begging for some information here which is kind of sad.
But I actually think that is going to happen and we're just you know -- -- hair -- waiting for the the news to actually come out.
OK Jamie stem eyeliner re -- -- of those fashion and Bob and Greg as well what we're saying right now Greece is basically.
The fall of the government the fall of a -- a complete economy that is Greece yeah that as well this volatility continues to hit -- week after week.
Yeah it does end and -- that you know to james' point about socialism.
You know what they're basically trying to decide right now is whether.
Everybody's gonna be made whole war they're going to pick and choose like is Greece going to -- -- -- Greece.
Debt holdings going to take a haircut and right now they're trying their best to make everybody whole.
At the end of the day -- Jamie indicates they're not going to be able to do.
And you know what Greg what we've seen when it's so different from 2008 the financial crisis is that was banks that was leverage I was mortgage -- the -- -- it's about government debt it and saying that we continue to talk about every David's out of control not just in Greece but in this country.
I think there's a deep and abiding concern about the health of the banks there as well which is why the governance the governor.
Governments have been trying to shore up the banks.
And I worry about it may be Jamie can answer this I worry about the impact on US financial systems if Greece goes down and the fire walls don't work.
-- Okay well I actually think that they'll take Morgan Stanley for example there were some reports last week about how much exposure.
Morgan Stanley have and what -- net exposures -- to France and it turned out not to be accurate.
So I actually think that most of the net exposure to Europe.
Has either been neutralized the hedging or is limited to Begin with in the United States I think our banks are pretty well capitalized and can handle.
The situation over there.
We don't really know what the capitalization says the situation is and it looks like the ESF that -- EFSF was actually designed to help the banks recapitalize themselves so I think that the capitalization.
But what they're contemplating over there will probably help if it doesn't -- Fed's gonna come to your rescue they did it in 2000 they it's going to happen again.
You're talking about the European bailout funded that's that's basically what that -- whether it's 400 billion euros some are looking for two trillion Euro I don't think that's gonna happen but up.
The -- before I let you go you do have some defensive plays and areas that you're looking at here in US markets.
-- ways that we can actually protect ourselves in particular you like the energy sector good defense supply why do you like it.
Well this couple reasons one oil prices have been stubbornly higher than sixty dollars a barrel for some time.
And it doesn't take a lot you know for oil companies and energy companies little in the like to make money.
When oil prices are so high so I I think it's it's a good place to get earnings power when you're talking about you know you know other places the market virtually difficult.
In addition companies like ExxonMobil and Chevron and others can continue to pace solid dividend so dividends are not a concern for investors you're getting -- And there's a lot of lot of other things plus there's MA activity this continues to happen Kinder Morgan El Paso.
There's a lot of you know other things -- can can can can put support the price of the shares going forward something it's a good place to hide but don't forget about technology that -- been beaten up.
It's great place to find investment opportunities at the moment.
Are right in -- -- a lot of the technology names as a sector you like technology because they got was claimant count due three days in the valley and it's all about technology right on you like that sector.
Oh absolutely I mean a lot of people been complaining a little but apple.
But you know rim would kill to have a seventeen million unit quarter -- like apple did.
You know you try to tell them you know seventy million units and they would just you know fall over -- -- get it.
I just bought an iPhone -- -- it's a fantastic device.
I didn't have -- before all the Verizon customer and I've been waiting for to come out you're gonna see numbers like folks like me you've been waiting to buy that new phone.
We do show through in this quarter so it's it's just a very very short term issue.
And now the next quarter's gonna be apple back in the black it didn't catch -- Just can't see any -- I accident Harris financial group Jamie thank you have very much for the insight of course we are watching shares of apple in the sector overall technology it was Clinton's gonna -- -- -- that coming up.
